214
www.amazoniainvestiga.info ISSN 2322- 6307
DOI: https://doi.org/10.34069/AI/2022.60.12.23
How to Cite:
Harahonych, O., Panova, L., Doroshenko, L., Mirzayeva, A., & Aliyeva, A. (2022). Digitalization and legal regulation of public and
private transactions in the digital environment: Concepts and development prospects. Amazonia Investiga, 11(60), 214-223.
https://doi.org/10.34069/AI/2022.60.12.23
Digitalization and legal regulation of public and private transactions in
the digital environment: Concepts and development prospects
Цифровізація та правове регулювання публічних і приватних транзакцій у
цифровому середовищі: концепції та перспективи розвитку
Received: November 29, 2022 Accepted: December 28, 2022
Written by:
Oleksandr Harahonych104
https://orcid.org/0000-0002-8984-2399
Liydmyla Panova105
https://orcid.org/0000-0002-1393-8626
Lina Doroshenko106
https://orcid.org/0000-0001-9748-6358
Afat Mirzayeva107
https://orcid.org/0000-0002-7966-105X
Asmar Aliyeva108
https://orcid.org/0000-0002-7467-0432
Abstract
Digitalization of social life, which has recently
gained significant momentum, leads to an
acceleration of the pace of development of all
related areas that meet the needs of such a
society. Information technology and private and
public transactions were touched upon in the
article. At the same time, currently, neither
Ukraine nor any other state can claim a perfect
normatively established settlement of issues of
public and private transactions in the digital
environment, which can include the prospect of
introducing future innovations, since the daily
rapid development of information technologies
makes any the existing legislation is partially
outdated and irrelevant. In turn, the analysis of
the essence and features of electronic
transactions, and the comparison of the
regulation of their use in different countries will
allow to development of a basis for a quick
response to digitalization changes taking place,
in particular, in the field of financial services.
The method of analysis and synthesis, the
method of theoretical generalization, and
systematization serve as the methodological
104
Doctor of Legal Sciences, Associate Professor, Associate Professor of the Department of Economic Law and Economic Process,
Institute of Law, Taras Shevchenko National University of Kyiv, Ukraine.
105
Ph. D., Associate Professor of Civil Law Department, Taras Shevchenko National University of Kyiv, Ukraine.
106
Ph.D. in Law, Associate Professor, Associate Professor of the Department of Economic Law and Economic Justice, Taras
Shevchenko National University of Kyiv, Ukraine.
107
Ph. D., Associate Professor of Department of Civil procedure and commercial law, Baku State University, Azerbaijan.
108
Ph. D., Associate Professor of Department ofCivil procedure and commercial law of Baku State University, Azerbaijan.
Harahonych, O., Panova, L., Doroshenko, L., Mirzayeva, A., Aliyeva, A. / Volume 11 - Issue 60: 214-223 / December, 2022
Volume 11 - Issue 60
/ December 2022
215
http:// www.amazoniainvestiga.info ISSN 2322- 6307
foundation of this study. The result of this study
is the identification of problematic issues of
regulation of public and private transactions in
the digital environment in the conditions of
digitalization, as well as the determination of the
vector for future research on this topic and the
introduction of changes to the regulatory and
legal framework of Ukraine. A conclusion was
made about the need to take digitalization into
account in order to build an effective competitive
digital economy with the appropriate tools to
protect the rights of subjects of economic legal
relations.
Keywords: digitalization, electronic
transactions, information technologies, digital
economy, cryptocurrency.
Introduction
The life of modern society is closely related to
the use of information technologies. Almost any
human activity, in particular with regard to the
performance of work, the provision and receipt
of certain services, the purchase and sale of
goods, i.e. those spheres of life that have an
economic nature and are characterized by
payment, currently gravitates towards the
digitalization of the accompanying processes,
including through the use and popularization of
electronic transactions that exist due to the World
Wide Web.
Electronic transactions are a convenient way to
achieve the final goal because when using them,
time and effort are minimal. In this regard, taking
into account the realities of modern life,
electronic transactions are predicted to find their
manifestation in everyday life more and more
often. Thus, the application of elements of
electronic interaction within the scope of
providing financial services acquired a new and
more thorough meaning due to the spread of
coronavirus diseases, which led to the stagnation
of the trend of contactless communications
between subjects of legal relations. Regarding
Ukraine, a new impetus for the development and
introduction of innovations in the field of
electronic financial services should be a full-
scale invasion of the territory of Ukraine, since in
such conditions, namely in the conditions of
martial law, the organization, speed, and mobility
of transactions play a decisive role in ensuring
the normal functioning of both the business
sphere and the client's consumer sphere.
At the same time, the electronic form of a
financial service, which at first glance seems to
be a quick one-time action, includes a
multifaceted mechanism of interaction in the
communication environment between the service
provider and a significant number of clients,
which must necessarily be accompanied by the
availability of information about such a financial
service regardless of such factors as the client's
location and time of day, as well as being
characterized by the globality and
personalization of services, the ability to quickly
make decisions in the process of such interaction
between the system and users. That is why, in
order to avoid possible foreseeable failures in
such a system of relations and to restore the
normal situation as soon as possible in the event
of their occurrence, it is necessary to regulate the
issue of electronic transactions at the state level.
In addition to the problematic issues that already
accompany the provision of certain types of
financial services, electronic transactions are
burdened with other risks associated with their
form. Thus, when using electronic transactions,
there is a high probability of abuse of the
capabilities of the digital environment: illegal
transfer of personal and other data, and
unauthorized interference in the work of the
relationship system. Such abuses can cause
significant damage to both private and public
interests, which will have consequences in the
216
www.amazoniainvestiga.info ISSN 2322- 6307
form of, in particular, financial losses of
individuals and businesses, deterioration of the
reputation of banking institutions, and
undermining of general trust in the authorities.
Thus, the official regulation of electronic
transactions should become a priority direction
for the development of an effective mechanism
for regulating the modern economy taking into
account the needs of society in digitalization.
At the same time, it is worth understanding that
the state regulation of electronic transactions,
given their multifaceted nature, cannot be simple
and one-syllable. Firstly, the nature of electronic
transactions is currently not sufficiently studied
at the theoretical level, and the practice of their
recognition and application is not stable, which
in turn leads to disputes regarding the
classification of these transactions in the sphere
of regulation of certain legal relations. In
particular, electronic transactions can be used as
a category of civil law, and financial law. Thus,
even if a separate normative-legal act, regulating
the implementation of electronic transactions is
adopted, there will be a number of normative-
legal acts that must be brought into line with the
requirements for the use of such transactions.
Secondly, since electronic transactions are
directly related to the achievements of digital
technologies, their development is unreasonably
fast, which does not allow the legislator to
quickly respond to changes in the field of
electronic transactions, and accordingly to
update existing or adopt new legislation on this
issue. The ideas about new resources and new
types of services that are provided with the help
of information technologies appear almost every
day, and the lists of entities that actively
implement innovative technologies in their
activities are replenished.
Taking into account the above, realizing the
prospect of the further introduction of
digitalization of public and private transactions
in the digital environment, in order to prepare the
ground for the state regulation of relations in the
field of electronic transactions, it is necessary to
study the features of such transactions, in
particular within the limits of foreign regulatory
experience.
Theoretical Framework or Literature Review
A significant contribution to the disclosure of the
concept of "digitalization" was made by H.
Zhosan (2020), who analyzed in detail, in
particular, the state policy of Ukraine within the
scope of this issue. Her works include a detailed
breakdown of digital transformation into
components: external communications, business
models, project processes, lean manufacturing,
working with data, internal communications, and
relationships. The scholar studied individual
aspects of the spheres and directions of
development of digitalization, namely the
digitalization of banks, the market, the financial
market, production, the economy as a whole,
business, education, professions, and the entire
society in general. According to the result of the
researcher's work, the global unification of the
digital and physical world became obvious.
The efforts of S. Leonova and Babich (2022)
made a significant contribution to the study of the
main trends in the introduction and development
of digital technologies in the banking sector of
the economy. The research is built around the
factors of the impact of digitalization on the
marketing perspective of a commercial bank for
potential customers. Thus, the conclusion of the
research was, in particular, a recognition of the
fact that the use of modern technologies by
banking institutions makes such an institution
more attractive both for the client and for
investors and potential partners. At the same
time, the researchers also paid attention to the
barriers to the use of innovations by banks.
Yu. Romanovska and Skladanyuk (2022)
focused on the study of digitalization of the
banking sector in the conditions of a pandemic,
namely mass diseases due to COVID-19. The
scholars emphasized the advantages of
popularizing the digitalization of the banking
sector, in particular, the most relevant
innovations that have found a place in the
activities of banking institutions (blockchain,
sharing). They also insisted on the need for close
cooperation between banks and other financial
institutions using all possible and available
innovative digitized technologies, because only
under such conditions the active and effective
development of the banking sector becomes
possible.
The result of the joint work of such scholars as
O. Khamidov et al., (2021) was the disclosure of
the peculiarities of the development of the
financial market of Ukraine, in particular through
the prism of the introduction of digital
technologies. A lot of attention has been paid to
the place in the system of the digital economy of
e-commerce, manifested through e-marketing, e-
flow of capital, e-data exchange, e-banking, and
e-commerce.
Volume 11 - Issue 60
/ December 2022
217
http:// www.amazoniainvestiga.info ISSN 2322- 6307
The cumulative work of S. Volosovich and
A. Vasilenko (2019) is aimed at determining the
place of Regtech in the ecosystem of financial
technologies. The term Regtech refers to a set of
technologies that optimize the control system
over the fulfillment of regulated requirements.
These technologies are aimed at facilitating and
automating the submission of various types of
reports, and data accumulation, but they are not
devoid of many risks. The mentioned authors
proved that the digitalization of relations
between subjects of the economic sphere
contributes to the digitization of those internal
processes that take place locally in the institution.
No less productive is the collaboration of
scientists M. Korol and S. Parlag (2020), who
studied the impact of digitalization on the
banking sphere. In their works, the issues of
implementation of programs for the development
of the banking sector of the economy,
implementation of electronic payments and
electronic document flow in the banking
institution, the emergence, problems, and further
development of the Fintech market, and the
provision of cyber protection were manifested in
their works.
O. Stashchuk and R. Martyniuk (2021) studied
the processes of introducing innovations in the
banking sphere, considering the need to improve
the tools for ensuring financial security.
S. Reverchuk and O. Tvoridlo (2022) also
studied the peculiarities of the development and
state regulation of banking services in Ukraine in
the conditions of digitalization. The authors
considered the cryptocurrency market, the
prospect of the creation and further functioning
of neo-banks, and the activities of banks using
digital technologies in general. The result of the
research was, in particular, the consolidation of
the position that cryptocurrency creates many
inconveniences for the existing economic
system, which are connected, in particular, with
the impossibility of controlling and monitoring
the emission and circulation of cryptocurrency at
the state level.
The modernization of modern payment systems
is analyzed by O. Dzyublyuk (2020). It can be
seen from their content that electronic money is
the latest financial instrument that will eventually
replace traditional forms of monetary relations.
The theoretician-economist was also engaged in
the analysis of the place and role of electronic
money in the digital economy, its further
formation and functioning in ensuring the
movement of goods, services, and works, the
need to implement monetary policy in order to
ensure the financial stability of modern society.
In the writings of O. Malakhova (2019), her own
vision of approaches to the implementation of a
system for the development and implementation
of digital services for transactions is revealed.
The scientist determined, in particular, the
necessary degree of involvement in the
implementation of digital technologies in the
banking sphere of relevant specialist developers
with the aim of adaptive transformation of the
banking industry into a digital ecosystem.
The basic theoretical foundation for the further
study of digitalization in the sphere of economic
relations was created by lawyer K. Nekit (2022),
who treated digitalization from a legal point of
view. The scientist paid a lot of attention to
determining the legal status of cryptocurrency
both in Ukraine and abroad, namely in such
countries as the USA (or separate states), China,
Canada, Great Britain, Germany, Austria,
Estonia, Singapore, Portugal, Qatar, Bangladesh,
Brazil, Colombia, Ecuador, and Bolivia. The
works of K. Nekit prove that leaving crypto-
assets outside the legal field contributes to their
use in illegal activities and deprives the state of
significant revenues of their proper taxation.
Thus, it is necessary to establish the legal
regulation of the circulation of crypto-assets.
The articles of V. Logoida (2021) are also
devoted to the study of foreign experience in the
perception of digital assets using the example of
cryptocurrencies. The scientist's detailed
comparative analysis included the countries of
Latin America: El Salvador, Mexico, Brazil,
Argentina, Cuba, Chile, Colombia, Costa Rica,
Ecuador, Dominican Republic, Venezuela,
Uruguay, Panama, Paraguay, and Bolivia. The
author researched the current legislative acts of
the countries of the region and the main existing
legislative proposals regarding the status and
circulation of cryptocurrencies, in particular
bitcoin, as well as administrative and, in part,
judicial practice in matters of qualification of
cryptocurrency as an object of civil rights.
Qin et al., (2021) took a closer look at
decentralized finance, debuting as an ecosystem
offering transparency and control, partly due to
the integrity-protected underlying blockchain, as
well as the current higher returns on financial
assets.
The analysis of the works of the above-
mentioned authors makes it possible to state that
the issues of digitalization of the financial sphere
218
www.amazoniainvestiga.info ISSN 2322- 6307
are still relevant for study since there are still a
number of problems that need urgent solutions
for the proper functioning of digital economic
processes.
Methodology
The research was carried out using both general
scientific and special methods, with the help of
which relevant conclusions were made, which
are important for further study of this topic, i.e.
creating a theoretical foundation for the
regulation of the processes of digitalization of the
financial sphere.
In particular, the dialectical method served a
deeper understanding of digitalization in the field
of finance and those relations that arise and
progress in connection with its implementation.
The specified method made it possible to single
out and investigate the general properties,
connections, and regularities characteristic of the
implementation of information technologies.
The analysis method made it possible to consider
digital transactions as a single system, a working
mechanism, which is a set of relationships
between each element of the studied system.
Complex comprehensive consideration and
further use in research of such concepts as
digitalization, information technology, digital
economy, digital environment, state transactions,
and private transactions became possible through
the use of the system-structural method. In this
way, the close relationship between the
mentioned concepts and their dependence on
each other within the digitalization processes was
traced.
The result of the research was also achieved due
to the use of the epistemological method, which
contributed to the study of the manifestation of
digitalization in the field of finance through the
prism of comparing the visions of such processes
set forth in scientific works and regulatory legal
acts.
The basis for clarifying the main purpose of
electronic public and private transactions, as well
as the digitalization of the financial sphere as a
whole, is the functional method.
Due to the axiological method, a conclusion
appeared regarding the global value of those
social processes that led to the digitalization of
spheres of social life, and vice versa - the value
of digitalization affecting society. It was this
method that gave an understanding that
information technologies, the implementation of
which is the basis of digitalization, is the driving
force for accelerating many processes of
everyday life, in particular those that are carried
out within the banking business.
The method of systematization made it possible
to unify general principles about the subject of
research, which allowed us to create our own idea
about the digitalization of the financial sphere, in
particular, about the legal regulation of public
and private transactions in the digital economy.
The comparative legal method made it possible
to distinguish the attitude of the countries of the
world to individual assets of digitalization using
the example of cryptocurrency. So, the above-
mentioned method helped to work out the
experience of cryptocurrency adoption by such
countries as Ukraine, China, Thailand, Great
Britain, Canada, El Salvador, and Mexico. Thus,
the specified method made it possible to
conclude that the lack of equal treatment of
cryptocurrency inhibits the development of the
global digital economy.
With the help of the method of generalization, a
general picture of the problems of the researched
topic was formed, which in turn made it possible
to outline the vectors of theory and practice
development for its further solution.
The specifics of the logical-legal method made it
possible to formulate a number of proposals for
the facilitation and effectiveness of the
introduction of digital technologies in the field of
financial services, in particular, regarding the
normative regulation of the introduction and use
of innovations in the banking sector, the
implementation of a preliminary adequate
assessment of the benefits and risks of using the
assets of digitalization and taking measures to
minimize negative consequences of the
implementation of digitalization, the need for a
careful selection of the approach to the
implementation of the system of development
and introduction of digital services for carrying
out transactions, the need for international
determination of the legal status of digital assets.
Results and Discussion
For a more fundamental understanding of the
specifics of digitalization and legal regulation of
digitized public and private transactions, it is
worth paying attention to the concept and content
of digitalization.
Volume 11 - Issue 60
/ December 2022
219
http:// www.amazoniainvestiga.info ISSN 2322- 6307
Regarding the interpretation of the concept of
digitalization, there is no universally accepted
vision of such a concept, but any of the
definitions are related to information
technologies and their use to facilitate daily life.
Thus, H. Zhosan positions digitalization as a
qualitatively new type of information and
telecommunication technology that cover and
change all spheres of modern industrial and
social life, and although it is in the process of
formation, it is already a powerful potential that
provides a chance for companies and countries to
achieve the leading positions in key areas of
socio-economic development (Zhosan, 2020).
For the state as a whole, digitalization is an
opportunity to accelerate the development of the
economy, increase the attractiveness of
cooperation between business owners and state
structures, and simplify this procedure. For
citizens, it means new opportunities, saving time,
and promising professions and jobs (especially
for people with disabilities). For business, it
means improving work, optimizing resources,
reducing costs, etc. (Romanovska & Skladanyuk,
2022)
It is difficult to disagree with the fact that
digitalization is a progressive direction of
development of all spheres of social life, as it is
aimed at meeting the needs of a demanding
mobile modern society. The introduction of
digitalization to the financial sphere will provide
society with convenience, and this convenience
will be manifested both within the scope of
administration/management of processes
(submission of various types of reports), and
convenience in receiving financial services
themselves, speed (you can receive certain
services without leaving home) and a kind of
safety (minimization of forced interpersonal
contact).
E-commerce, which includes e-marketing, e-
flow of capital, e-data exchange, e-banking, and
e-trade, occupies an important place in the
formation of the digitalized financial market
(Khamidov et al., 2021).
Thus, today, the process of selling banking
products is being transformed from a standard set
of ordinary and additional conveniences for
customers to a strategic sales management tool
that, through digitalization (automation of
banking processes), improves relations with the
target audience (Leonova & Babych, 2022).
Regarding the security of public and private
electronic transactions, it is worth noting that
such security should be considered both from the
side of strengthening and from the side of
omission. Thus, the digitalization of economic
processes carries risks, in particular, the leakage
of personal data due to unauthorized intervention
in the operation of the system, which in turn
threatens the security of the subject of such
economic relations. On the other hand, the use of
digital technologies can ensure the
personalization of electronic payments at a high
level.
For example, payments using PayPal or Internet
banking are associated with tokenization and
blockchain technologies. It is thanks to
tokenization that the safety of electronic payment
operations is possible, which arises as a result of
the use of a special data encryption system. So,
at the time when it is necessary to use
information about the client's payment card
(number, CVV code) to carry out the
corresponding operation, tokenization ensures
the replacement of such data with a random, one-
time selection of numbers and letters, which in
themselves have no binding to a specific one-
time transaction has no value. In this way, the
possibility of data leakage, which could get to
criminals and have negative consequences for the
owner of the payment card, is minimized. It is
worth noting that the currently popular
contactless payment methods Google Pay and
Apple Pay are based on the principle of
tokenization.
Security measures that can be used exclusively
within digital banking operations include remote
blocking of a lost smartphone, encryption of
access to personal files and access to
applications, unique encryption of document
circulation, and customer identification by
fingerprint or Face-ID (Stashchuk & Martyniuk,
2021).
The advantages of digitalization of the economic
sphere include:
− increase in labor productivity;
− increasing the competitiveness of business
entities;
− reduction of production costs;
− a creation of new jobs;
− overcoming poverty and social inequality.
At the same time, the transition to digitalized
transactions had some significant drawbacks,
including:
220
www.amazoniainvestiga.info ISSN 2322- 6307
− high level of cyber threats, in particular
regarding the unauthorized distribution of
personal data;
− impact on behavioral reactions within the
limits of economic and financial literacy of
a large number of people;
− the risk of spreading unemployment in the
category of certain professions, the activities
of which are replaced by acquisitions of the
use of information technologies;
− discredit on the basis of the "digital divide"
between the level and conditions of access to
the digital environment in the same country
or in different countries.
Market risk in the form of negative consequences
from a significant change in market conditions is
also likely; the technological risk associated with
disruption of the uninterrupted provision of
services due to failures or errors in the operation
of the service; legal risks arising from
insufficient legal regulation of the digital
economy, therefore, result, in particular, in
consumer insecurity (Volosovych & Vasylenko,
2019).
Thus, the set of potential shortcomings of the
digital sphere can develop and worsen to a
significant degree of influence on the efficiency
of the functioning of the financial system as a
whole, therefore, the introduction of total
digitalization of economic processes must be
evaluated from various sides.
However, it is not worth giving up digitalization
because of possible negative consequences, since
such a refusal will entail a decrease in the level
of customer orientation, the decline of the service
sector, the financial sector, and the management
sector, and the inhibition of the development of
business and the state as a whole. The
competitive advantages of using the assets of
digitalization technologies are flexibility,
mobility, reducing the cost of services and
payments, using innovative sources of income,
facilitating the entry of business entities into the
global market, and increasing the degree of
availability of goods and services in any country
in the world.
Among the assets of the digitalization of the
economic sphere, we can also single out the
introduction of Bank ID, the creation of
conditions for the provision of non-bank
financial services online, the introduction of
electronic signatures in the banking system, the
creation of conditions for the transition of banks
to Paperless, and others (Korol & Parlag, 2020).
Recently, taking into account the possibilities of
information technologies, the so-called digital
assets have become widely used. Among them
are transactions in the financial sphere using
cryptocurrency.
The relatively new cryptocurrency market is a
subject of significant research interest in the
current environment of financial innovation in
payment services. At the same time, the existence
and development of such a market create a
challenge for the financial system of Ukraine,
since the National Bank of Ukraine and other
state regulators cannot control the emission of
cryptocurrencies and their circulation
(Reverchuk & Tvorydlo, 2022). The same
situation has developed in the world in general.
Absence of a single emission center, and
therefore control over the issue; lack of safe
storage of currencies in electronic wallets and
guarantees regarding the return of sums in case
of theft; high energy costs of cryptocurrency
mining; limited possibilities of their use as means
of circulation and payment; the unstable value of
cryptocurrencies, expressed in traditional
currencies are currently problematic issues of the
economies of many countries that still need an
urgent solution (Dzyublyuk, 2020).
In the opinion of the author, the global problem
of digital assets in general, and cryptocurrency in
particular, is the lack of a generally recognized
attitude towards such assets and legal regulation
of their use. Within the scope of this issue, it is
advisable to consider the approaches of various
states (both progressive in terms of economic
development and "middle-class") to the
consolidation of the implementation of digital
assets.
A significant omission, in the author's opinion, is
that currently no international regulatory act
clearly regulates the use of digital assets. Neither
the International Forum of Retail Payments, the
World Bank, the Committee on Payments and
Market Infrastructure, the Bank for International
Settlements, nor the European Central Bank
could properly influence the need to settle this
issue.
Thus, some states of the world have made efforts
to transfer the use of digital assets into the legal
sphere, but the lack of a general approach at the
international level to the recognition of digital
assets as independent payment units leads to the
inhibition of foreign trade with the help of such
transactions.
Volume 11 - Issue 60
/ December 2022
221
http:// www.amazoniainvestiga.info ISSN 2322- 6307
For example, China, being one of the most
economically developed countries, prohibits the
use of cryptocurrency. China does not recognize
cryptocurrencies as legal tender, and China's
banking system does not accept cryptocurrencies
and does not provide relevant services (Nekit,
2022).
However, the state still recognizes the need for
digitalization of the financial sphere, as indicated
by the conclusion of at least eight secure asset-
backed agreements using blockchain in 2019
(7 transactions were conducted in the private
sector and one by a state financial institution –
the Bank of Communications) (The Financial
Crimes Enforcement Network, 2019).
Canada treats cryptocurrency as a commodity at
the legislative level. Income from transactions
involving cryptocurrency is generally treated as
business income or capital gains, as the case may
be. When cryptocurrency is used to pay for goods
or services, the CRA treats it as a barter
transaction for income tax purposes
(Government of Canada, 2021).
A similar situation is developing in Mexico.
Thus, in a relatively recent conversation with
journalists, the head of the Bank of Mexico,
Alejandro Díaz de Leon, noted that the use of
cryptocurrency has the characteristics of a barter
agreement and not the circulation of advanced
fiat money, and Bitcoin itself is an analog of
precious metal and not a means for daily
calculations, and therefore Mexico has no plans
to recognize cryptocurrency as a parallel legal
tender in the near future.
It is worth noting that not all Latin American
countries adhere to this position. Thus, El
Salvador was almost not the first on the continent
to implement legislative legalization of
cryptocurrency, having adopted the
corresponding law "On Bitcoin", which entered
into force on September 7, 2021. Although only
one type of cryptocurrency has achieved
recognition - bitcoin, which is recognized as an
official means of payment, which must be
accepted indefinitely by all legal entities and
individuals in payment of any type of monetary
obligations, however, the adoption of this
legislative act created a solid foundation for
further regulation of the use of other types of
digital assets (Logoida, 2021).
Thailand has not remained aloof from the
digitalization process, where the Royal Decree
on the Business of Digital Assets defines
cryptocurrency as an electronic block of data
built on an electronic system or network, which
is created to be a medium of exchange for the
purchase of goods, services or other rights,
including an exchange between digital assets
(Qin et al., 2021).
The UK is also on the path to defining its own
position on the use of digital assets, as the
Government has expressed its intention to
legislate certain stablecoins (a type of asset used
as a means of payment) into the regulatory
perimeter (HM Treasury, 2021)
Ukraine went even further in regulating the issue
of the use of digital assets, adopting the Law of
Ukraine "On Virtual Assets" on February 17,
2022. The specified legislative act clearly
regulates the existence of virtual assets in the
economic and legal field, determining the status
of such assets, and their classification,
establishes the features of acquisition and
realization of ownership rights to them, adapts
recommendations for financial monitoring of the
virtual assets market; determines the list of
professional service providers of virtual assets
and their registration; determines the market
regulator (Law No. 2074-IX, 2022).
Having analyzed the legal regulation of digital
assets in various states, it is worth noting that
Ukraine, in its desire to meet the modern high-
tech challenges of society, occupies not the last
position in the world ranking, as it is trying to
follow the path of digitalization, in which it is
already making appropriate progress.
The emergence and development of digital
technologies, in particular electronic
transactions, have had a significant impact on the
banking sector as well.
The banking sector is almost the first to develop
a mechanism for rapid adaptation to the needs of
customers related to the introduction of
information technologies. In this regard, such
approaches to the implementation of the
development system and introduction of digital
services for transactions as the creation of a
proprietary development system and the creation
of a digital industry ecosystem based on the
consolidation of efforts are popular among banks
today.
The first model is characterized by the
introduction of special digital services, which
takes place under the condition of the
involvement of the company developer of such
services and/or independent development and
promotion. This approach to the digitalization of
222
www.amazoniainvestiga.info ISSN 2322- 6307
the banking sector is successful, but it also has a
number of significant disadvantages, including
the lack of the client's ability to independently
choose an urgent need, since the developer
(founder) of the proprietary system himself
determines what the client wants, and the hyper-
fast dynamism of the relationship between the
client and the bank, since at the end of the
development and implementation of a certain
project, customer orientation may change its
subject direction, in connection with which the
created product may lose its relevance.
The principle of creating an ecosystem of the
digital industry based on the consolidation of
efforts, in the author's opinion, is less resource-
intensive compared to the previous approach and
consists in combining the efforts of the
community of developers of digital technologies
and applications, enterprises of the industry, as
well as other interested parties. (Malakhova,
2019) Thus, the bank can achieve the desired
result faster within the scope of digitalization of
the provision of financial services but may lose
some advantage to the competitor in the field of
introducing its own innovations.
In any case, the consolidation of the positions of
digital technologies in all spheres of social life,
as well as their rapid development, pose new
challenges to both businesses, banks, and
legislators, since all the named subjects must
integrate into the new realities of life, manage to
bring compliance with the new challenges of
modernity, internal processes and mechanisms
that regulate their activities and ensure the
realization of consumer needs.
Conclusions
The result of the study of issues of digitalization
and legal regulation of public and private
transactions in the digital environment was the
following conclusions:
1. The reformation processes of modern
society are connected, in particular, with the
rapid formation and development of
information technologies of various kinds.
Changes in society lead to inevitable
changes in all spheres of activity that meet
the needs of such a society. Thus, the
digitalization of transactions in the digital
environment is a consequence of the rapid,
but natural and expected, pace of
digitalization of public needs.
2. Digitalization of transactions is a vivid
example of the people-centered policy of
both the state and relevant financial
institutions. It allows, in particular, banking
institutions to carry out their activities on the
basis of customer orientation, mobility,
convenience, accessibility, and openness to
providing and receiving financial services.
Thus, the introduction and use of Internet
banking, tokenization, and blockchain
technologies have brought the interaction
between the client and the bank to a
qualitatively new level.
3. Despite significant advantages, the total
digitization of the banking services sector
has its drawbacks, including a high risk of
cyber threats, and unauthorized distribution
of personal data. Thus, when introducing
digital technologies into the field of
transactions, it is necessary to develop the
concept of implementation of the system of
development and introduction of digital
services for transactions as much as
possible.
4. The partial transition of the financial sphere
to the digital environment led to the spread
of the use of digital assets. The main
problem of such use is the lack of a generally
recognized national and international vision
of their essence and meaning. Thus, the
analysis of legislative initiatives of selected
states on different continents confirms the
presence of a colossal difference in the
perception of digital assets, using the
example of cryptocurrencies: from the ban
on their use in China to the complete
recognition as a means of payment in El
Salvador.
5. Digitalization of society leads to the need to
regulate at the legal level the peculiarities of
mutual relations, which are accompanied by
the use of information technologies. At the
same time, such regulation must be of high
quality and timely, because it is under the
condition of compliance with certain
indicators that the regulation of
digitalization will be effective and will allow
it to satisfy the requirements of the client,
business, and the state.
Thus, the study of the features of the
implementation of information technologies in
the financial sector of public life is a promising
direction of scientific research, the result of
which will be the development of a significant
theoretical base for the further legal regulation of
digitalization processes that are taking place in
the realities of today and will take place in the
future.
Volume 11 - Issue 60
/ December 2022
223
http:// www.amazoniainvestiga.info ISSN 2322- 6307
Bibliographic references
Dzyublyuk, O. (2020). Essential aspects of
electronic money in the conditions of
digitalization of banking business. Bulletin of
the Ternopil National Economic University,
2, 76–92. Retrieved from:
http://visnykj.wunu.edu.ua/index.php/visnyk
j/article/view/1104/1209
Government of Canada. (2021). Guide for
cryptocurrency users and tax professionals.
Retrieved from:
https://www.canada.ca/en/revenue-
agency/programs/about-canada-revenue-
agency-cra/compliance/digital-
currency/cryptocurrency-guide.html
HM Treasury. (2021). UK regulatory approach to
crypto assets and stablecoins: Consultation
and call for evidence. Retrieved from:
https://assets.publishing.service.gov.uk/gove
rnment/uploads/system/uploads/attachment_
data/file/950206/HM_Treasury_Cryptoasset
_and_Stablecoin_consultation.pdf
Khamidov, O., Mamanazarov, A.,
Maksimova, I., Slyusarenko, K., &
Kulishov, V. (2021). Paradigm of the
financial market of Ukraine. Journal of
European Economy, 20-4(79), 680-696.
Retrieved from:
http://jeej.wunu.edu.ua/index.php/ukjee/artic
le/view/1568/1567
Korol, M., & Parlag, S. (2020). Impact of
digitalization on banking activity in Ukraine.
Economy and the state, 9, 99-104. Retrieved
from:
https://dspace.uzhnu.edu.ua/jspui/handle/lib/
35064
Law No. 2074-IX, On virtual assets. The
Verkhovna Rada of Ukraine, 2022. Retrieved
from:
https://zakon.rada.gov.ua/laws/show/2074-
20
Leonova, S., & Babich, O. (2022). The influence
of digitalization parameters on the marketing
attractiveness of a commercial bank for
physical customers. Economy and society,
35, 27-36. Retrieved from:
https://economyandsociety.in.ua/index.php/j
ournal/article/view/1083/1040
Logoida, V. (2021). Legal status of
cryptocurrency in Latin America. Visegrad
Journal on Human Rights, 4, 121-128.
Retrieved from:
https://dspace.uzhnu.edu.ua/jspui/bitstream/l
ib/37200/1/Visegrad%20Journal%20on%20
Human%20Rights%20%E2%84%964-
2021%20%28Volodymyr%20M.%20Lohoy
da%29.pdf
Malakhova, O. (2019). Transformation of the
banking industry in the digital ecosystem.
Kyiv: KNEU. Retrieved from:
https://sci.ldubgd.edu.ua/jspui/bitstream/123
456789/9555/1/Zbirnyk_4_19.pdf#page=11
9
Nekit, K. (2022). Directions of changes in the
legal regulation of crypto-asset circulation:
analysis of foreign experience. Economy and
law, 1, 33-44.
http://economiclaw.kiev.ua/index.php/econo
miclaw/article/view/1068/1029
Qin, K., Zhou, L., Afonin, Y., Lazzaretti, L., &
Gervais, A. (2021). CeFi vs. DeFi –
Comparing Centralized to Decentralized
Finance. NY: Cornell Univercity. Retrieved
from: https://arxiv.org/abs/2106.08157
Reverchuk, S., & Tvorydlo, O. (2022).
Peculiarities of development and state
regulation of the banking services market of
Ukraine in conditions of digitalization.
Economic space, 179, 12-18. Retrieved from:
http://prostir.pdaba.dp.ua/index.php/journal/
article/view/1075/1036
Romanovska, Yu., & Skladanyuk, M. (2022).
Digitalization of the banking sector in the
conditions of the pandemic. Economy and
society, 36, 27-49. Retrieved from:
https://economyandsociety.in.ua/index.php/j
ournal/article/view/1120/1077
Stashchuk, O., & Martynyuk, R. (2021).
Digitization of the banking sphere in the
financial security system of a banking
institution. Socially competent management
of corporations in the conditions of
behavioral economics. Collection of
scientific papers, 1, 204-205. Retrieved from:
https://cutt.ly/N2SqZkW
The Financial Crimes Enforcement Network
(FinCEN). (2019). Application of FinCEN's
Regulations to Certain Business Models
Involving Convertible Virtual Currencies.
Retrieved from:
https://www.fincen.gov/resources/statutes-
regulations/guidance/application-fincens-
regulations-certain-business-models
Volosovych, S., & Vasylenko, A. (2019).
Regtech in the ecosystem of financial
technologies. Modern Economics, 15, 62–68.
Retrieved from:
http://dspace.mnau.edu.ua/jspui/bitstream/12
3456789/6190/1/volosovych.pdf
Zhosan, H. (2020). Development of digitization
in Ukraine. Economic analysis, 30 (1, Part 2),
44-52. Retrieved from:
https://www.econa.org.ua/index.php/econa/a
rticle/view/1792/6565656864