A STUDY OF THE EVOLUTION OF CRYPTOCURRENCIES IN THE VIRTUAL FINANCIAL SERVICES MARKET

The article analyzes financial instruments in the virtual financial services market. The concept of “cryptoactive” is clarified, the differences between cryptocurrencies and electronic money are considered, and the main advantages and disadvantages at the current stage of development of the virtual financial market are highlighted. The cryptocurrency market is characterized by instability, but it is constantly evolving under the influence of financial innovations that complicate its economic nature. This type of virtual asset continues to evolve and is gaining legal status in some countries that focus on innovation as a key tool for social progress. The main object of the study is the process of functioning and development of cryptocurrencies in the financial sector. As part of the analysis, the concepts of “crypto assets” and “cryptocurrencies” were defined, as well as the key advantages and disadvantages of their use. The positive aspects include: anonymity of the e-wallet owner’s data, an open transaction history, as well as the possibility of using cryptocurrencies not only as a means of payment, but also as an investment tool. The negative aspects include: high volatility, energy intensity, risks of bankruptcy of crypto exchanges, lack of legislative regulation and a significant risk of hacker attacks. It was also noted that the interest of institutional investors in cryptocurrencies has increased significantly due to the efforts of developers to eliminate negative factors. Currently, the network of cryptomats and retail outlets is expanding, well-known payment systems are beginning to accept major cryptocurrencies for payments, and many companies are already using cryptocurrency as a means of payment for their goods and services.