THE FORMATION AND EVOLUTION OF VIRTUAL ASSETS: FROM CONCEPTUAL DEVELOPMENTS TO THE NEED FOR LEGAL REGULATION

Abstract

The study analyses the historical background of the emergence and evolution of virtual assets in the context of the development of the digital economy and blockchain technologies. The author traces the path from the first concepts of digital currencies, such as eCash, e-gold, B-money, Hashcash and Bit Gold, to the emergence of Bitcoin and the further expansion of the virtual asset market through altcoins. The article systematises the key stages of development of virtual assets, starting with theoretical developments of the 1980s and 1990s and ending with modern cryptocurrency platforms. The article analyses the technical aspects of the creation of the first cryptocurrency projects, their features, as well as the factors that contributed to success or, conversely, led to failure. Particular attention is paid to bitcoin as the first decentralised cryptocurrency, its role in shaping the modern virtual asset market and its impact on the further development of digital financial technologies. Given the popularisation of virtual assets and their massive introduction into financial relations, the author considers the need for legal regulation of this area. The author identifies the main problems faced by states when attempting to regulate digital assets, in particular, classification of virtual assets, antimoney laundering (AML), consumer protection, taxation and their integration into the traditional financial system. The study demonstrates that states use different approaches to regulating cryptocurrencies: from a complete ban (China) to the creation of specialised legal mechanisms for their legalisation and control (the US, EU, Japan). The author also considers the development of stablecoins, smart contracts and decentralised financial services (DeFi), which further complicates the regulatory landscape. The author concludes that the historical evolution of virtual assets demonstrates a natural transition from conceptual developments to full-fledged legal regulation of this area. Despite the technical and legal challenges, digital assets continue to integrate into the global financial system, which confirms their long-term prospects. Further research in this area is needed to develop effective regulatory approaches that take into account both the innovative potential of virtul assets and the need for financial security and stability.