Digital currencies in the system of objects of legal relations

Volkova Mariya Aleksandrovna ORCID: 0000-0001-5928-6929 PhD in History Associate Professor; Department of Public Law and Digital Law; Non-governmental educational private Institution of Higher Education 'Moscow Financial and Industrial University 'Synergy'. 119602, Russia, Moscow, Troparevo-Nikulino district, Pokryshkina str., 8 room 2 sq.197 mvolkova2013@bk.ru

Bukaeva Irina Nikolaevna PhD in Law Associate Professor; Department of Civil Law and Process; Educational Institution of Trade Unions of Higher Education 'Academy of Labor and Social Relations' 32 Zarechnaya str., sq. 2, Balashikha, Russia, 143915 er15@mail.ru

Introduction

The concept of cryptocurrencies and blockchain is one of the most innovative phenomena in the field of information technology and finance. Its legal nature is complex and multilevel, causing numerous discussions in scientific circles. In various jurisdictions, cryptocurrencies can be considered as a means of payment, an investment asset, or a commodity. At the same time, in some countries cryptocurrencies are recognized as a legal means of payment and are regulated within the framework of financial legislation, in others they are prohibited or considered as illegal financial transactions. The lack of a globally unified legal framework makes it difficult to effectively protect the rights of consumers, investors, miners and all other entities involved in relations with cryptocurrency at the international level.

Studies of the civil law regime of digital currency have been conducted to one degree or another by a number of scientists, among whom are such as: T.V.Deryugina, L.G.Efimova, D.V.Fedorov, A.S.Lolaeva, V.A.Sadkov and others.

Having analyzed the published works on the regulation of this object of property relations, it can be stated that today there is no unified position on the essence of the legal nature of digital currency and the specifics of its legal regime in civil law. The above suggests the importance of studying digital currency from the point of view of its civil law regulation.

Thanks to the use of the analysis method, the author's position was developed during the research, which consists in the need to supplement the existing system of objects of civil rights with a new special object – digital currency. The use of the comparative analysis method made it possible to conduct a study of the main scientific concepts related to determining the essence and place of digital currency in the Russian system of objects of civil law, as well as to make proposals for improving Russian legislation.

In essence, cryptocurrency is a product of the blockchain - a chain of information blocks operating according to specified algorithms. A significant difficulty lies in the fact that the phenomenon of cryptocurrency itself remains insufficiently clear to the general public, who are not closely associated with digital technologies, which are not always able to fully distinguish cryptocurrency from other types of electronic money ^{[1, p.77]}. Therefore, in the literature one can find the opinion that this phenomenon has no socially useful economic function and a significant criminogenic potential ^{[2, p.142]}. This position does not seem entirely correct to us, because the fundamental difference between digital currency and digital rights or, for example, traditional securities, which generate financial and criminal risks when using it, lies only in the absence of detailed legal regulation. At the same time, there is no fundamental impossibility of introducing this new financial instrument into property relations (as can be seen from the example of countries that have allowed the use of digital currencies in settlements, subject to certain requirements). At the same time, the dependence noted by T. Neborak is interesting, pointing out that "among the leaders of the mass introduction of CBDCs are states that are widely considered authoritarian, although there are Scandinavian countries (in particular, Sweden) that are traditionally considered models of civil liberties.A characteristic thread of the CBDC debate in this regard is the issue of anonymity and the government's desire to limit it ^[3].

In our opinion, the existing gaps are due to the need to find the most rational approach, which is reflected in the current willingness of the state to include cryptocurrencies in the legal sandbox. Digitalization of all spheres of life entails the emergence of new financial instruments, therefore, it would be unwise on the part of the legislator to deny those that have already firmly entered into circulation and have proven their relevance to the market.

Basic research

On January 1, 2025, amendments to the Tax Code of the Russian Federation came into force, recognizing cryptocurrency as property for tax purposes (Federal Law No. 418-FZ dated 11/29/2024 On Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation). These amendments caused widespread discussion in the media, however, they did not bring anything new to the issue of the essence of the legal nature of the digital currency. Articles 19, 21 and 22 of the Federal Law "On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts of the Russian Federation" dated 07/31/2020 No. 259-FZ (hereinafter - FZ No. 259-FZ) (Federal Law "On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts Of the Russian Federation" dated 07/31/2020 No. 259-FZ ) Since January 1, 2021, it has been defined in a similar way. The only thing that has changed is the goals: if previously it was understood as property for the purposes of applying anti–corruption, insolvency (bankruptcy) and enforcement legislation, then since 2025, tax legislation has been added to it. At the same time, the legislator (intentionally or unintentionally) did not unify these norms and left open the question of what legal nature cryptocurrency will have as an object of civil law relations. At the same time, domestic legislation and judicial practice recognize cryptocurrency, called digital currency, as an object of property relations, and endow it with certain features that allow its participation in civil circulation from a legal point of view.

It should be noted that the content of the term "property" in civil law is considered from several points of view ^{[4, p.301]}, ^{[5, p.13]}, however, all authors note that this is a collective term, which, in fact, does not concern the origin of its elements themselves. It is thanks to this that it becomes possible to classify cryptocurrencies as property, without fully explaining their civil law origin, but allowing them to be identified in civil circulation. This circumstance will already be enough, for example, to protect the rights to cryptocurrency in contractual and tort disputes in accordance with the general tort established by art. 1064 of the Civil Code of the Russian Federation^{[6, p.46]}.

An important aspect of this innovation is to ensure transparency and predictability of economic relations between business entities. The ban on the use of digital currencies in commercial transactions helps to reduce potential losses associated with sharp fluctuations in the exchange rates of cryptocurrencies. This, in turn, will create more stable conditions for doing business and attracting investments, which is especially important in a modern economy facing external and internal challenges.

From the definition contained in Federal Law No. 259-FZ, a number of features can be identified that characterize the legal regime of digital currency and allow us to make an assumption about what place it occupies in the system of objects of civil law relations. Let's try to figure out which type of property the digital currency is most similar to in its features.

So, one of the central features are such as the existence exclusively in the form of electronic data, non-currency (it is not a monetary or settlement unit of any state), the absence of persons who are obligated to its owner (the only exceptions are operators and (or nodes of the information system, which have the only duty - to ensure compliance with the procedure for the release of these electronic data and the implementation of actions in relation to them to make (change) entries in such an information system according to its rules).

There are also features of cryptocurrencies that exclude the possibility of using legal mechanisms to ensure the fulfillment of obligations: the lack of information about holders of cryptocurrencies (anonymity of use, attracting many potential users), the lack of the need for accounting documentation and the lack of centralized control in cryptocurrency circulation systems.

O. Podtserkovny and L. Mogil substantiate the possibility of classifying cryptocurrencies as things, jusdem generis, bringing the understanding of cryptocurrencies closer to other things ^{[7, p.29]}. A.V. Sazhenov adheres to a similar position ^{[8, p. 121]}, who suggests considering digital currency as an incorporeal thing, while drawing analogies with how the legislation of Belarus regulates a similar object - a token (according to paragraph 3 of Appendix No. 1 to Decree of the President of the Republic of Belarus dated December 21, 2017 No. 8 "On the development of the digital Economy", the owner of a digital mark (token) is a subject of civil law to whom the digital mark (token) belongs by right of ownership or by other proprietary right (emphasis added). Their position is confirmed by E. N. Gladkaya, pointing out that in the context of digitalization, the idea of a thing solely as an object of the material world becomes irrelevant ^{[9, p.409]}.

However, by agreeing to classify digital currency as disembodied things, we will thereby exclude its content from the calculation, namely, the possibility of using it in calculations. Assuming its "materiality", we will come to the conclusion that all settlement operations using cryptocurrencies become exchange operations. If in relation to cash (classified by st128 of the Civil Code of the Russian Federation as a type of thing) such an assumption is still possible, given their undoubted naturalness (and that is taken into account only in cases where it is the form of money that acquires value (for example, in numismatics), then this would be incorrect with regard to digital currencies.

Yuan Baoqi also notes the uniqueness of cryptocurrencies and its dissimilarity with ordinary things, pointing out that property rights in cryptocurrencies such as Bitcoin may well represent a truly unique and new form of ownership, the legal rights to which are inseparable from registration in the blockchain ^{[10, p.6]}.

A. S. Lolaeva expresses the opinion that digital currency has similarities with binding rights, since each holder's right to it is closely linked to the obligations of other participants in the information system, determined by its internal rules of operation ^{[11, p.48]}. This position cannot be fully justified, since any binding right (existing exclusively in the digital environment, or not) generates certain obligations to the copyright holder. The absence of such an obligation to holders of digital currency is directly stipulated in the law, so we can agree with the authors who claim that it cannot now be recognized as a digital right. Thus, this is pointed out by T. V. Deryugina ^{[12, p.9]}, noting that in this case there are two features that characterize digital law - the absence of any right in the content of the digital currency (which is explicitly stated in its definition), and the relevance of the right to digital solely by virtue of the direct indication in the the law (art.141.1 of the Civil Code of the Russian Federation).

However, if we ignore the current legislation (allowing for the possibility of changing it), then we should recognize the similarity of digital currency with this type of object of civil rights, as T. Chan points out ^{[13, p.492]}.

The wording of clause 3.1 of Federal Law No. 259-FZ stating that digital currency is electronic data that is offered and (or) can be accepted as a means of payment is quite ambiguous.

The phrase "may be accepted" is not acceptable for such serious documents as Federal Law. Such expressions give rise to a double interpretation of the law. The legislator should define more specifically the understanding of "digital currency" and the possibility of using it in calculations. Moreover, the ban on the use of digital currencies as a counter provision in Federal Law No. 259-FZ, which until recently seemed to be a well-founded and timely measure aimed at ensuring the economic security and stability of the country, is now undergoing a transformation due to the entry into force of the Federal Law "On Amendments to Certain Legislative Acts of the Russian Federation" from 08.08.2024 No. 223-FZ. He allowed the Bank of Russia to begin an experiment on September 1, 2024 with the creation of a platform for the use of cryptocurrencies in international settlements using an experimental legal regime.

The assumption of the possibility of using digital currency in international settlements again raises the question of its legal nature - whether to consider it as a means of payment or whether it should occupy a different place in the system of objects of civil law relations. During the discussion, the potential risks and benefits of recognizing digital currency as an official means of payment should not be underestimated.

The obvious and well-known ones include: volatility, inability to control operations, and non-fiat. However, being disadvantages in stable economic conditions, during the period of economic sanctions and the changes currently observed in global financial markets, these disadvantages can turn into advantages. In particular, the widely discussed non-controllability of operations is quite easily circumvented by "grounding" operations on crypto exchanges regulated by the Bank of Russia, which is widely discussed in government agencies and the media (Ministries of the Russian Federation are discussing the creation of a crypto exchange under an experimental legal regime // https://www.comnews.ru/content/236949/2024-12-18/2024-w51/1009/ministerstva-rf-obsuzhdayut-sozdanie-kriptobirzhi-ramkakh-eksperimentalnogo-pravovogo-rezhima).

Thus, the exclusion of the expression "offered and (or) may be accepted as a means of payment," from Article 1, paragraph 3 of Federal Law 259-FZ will eliminate the legal uncertainty of the permitted legal regime of digital currencies and, after making a decision on the legal regime and the procedure for using digital currency in calculations, finalize paragraph 3 of Article 1 of the Federal Law. 259-FZ, so that it clearly reflects the new legislative provision.

In order for a cryptocurrency to qualify as electronic money, it requires prior provision of real money. According to paragraph 19 of Article 3 of the Law on the National Payment System (Federal Law "On the National Payment System" dated 06/27/2011 No. 161-FZ), an electronic means of payment is a method and/or device that enables the client of a money transfer operator to generate, confirm and send commands for making transfers within the framework of non-cash payments through infocommunication technologies, electronic media such as bank cards, and various technical devices.

In other words, it is a specially granted right of an authorized person to make payments if appropriate technical means are available. At the moment, the only thing that brings digital currency and electronic money closer together is their form of existence, which, of course, is not enough to classify them as objects of civil rights.

Currently, there is a ban on the issuance of monetary surrogates, which has good reason, as it ensures the stability of the financial system of the Russian Federation, and at the same time does not allow the digital currency to be recognized as a monetary instrument. However, using the example of El Salvador (where bitcoin is accepted on a par with the national currency, and the state budget is formed partly through the purchase of this cryptocurrency) (Vera Bergengruen. How Nayib Bukele’s ‘Iron Fist’ Has Transformed El Salvador // https://time.com/7015598/nayib-bukeles-iron-fist-el-salvador/)) We see that from an economic point of view, the non-fiat currency does not always completely exclude the possibility of using it in the system of domestic settlements. Moreover, the Bank of Russia has already taken one step in this direction by allowing the use of digital currency in international settlements (as we wrote above).

Indirectly, the similarity of digital currency with other means of payment is confirmed by judicial practice. Thus, in the ruling of the Supreme Court of the Russian Federation dated April 16, 2024, No. 69-KG24-3-K7 (Ruling of the Supreme Court of the Russian Federation dated April 16, 2024, No. 69-KG24-3-K7 // SPS ConsultantPlus), it is indicated that the court of appeal mistakenly did not check the existence of contractual relations between the parties and their content by applying the rules on unjustified enrichment. At the same time, the plaintiff's pre-trial claim addressed to R.M. Salakhov states that an investment loan agreement was concluded between the parties, under the terms of which the plaintiff undertook to transfer funds to the defendant, and the defendant to return them within six months with interest. The funds were transferred by the plaintiff in several stages by transferring USDT cryptocurrencies to the defendant's account for a total amount of 313,174.60 US dollars. Thus, the Supreme Court of the Russian Federation allowed the parties to conclude an investment loan agreement, which is an unnamed type of loan agreement in accordance with art.807 of the Civil Code of the Russian Federation. However, the subject of the loan (according to the Civil Code of the Russian Federation) can only be money, things defined by generic characteristics, or securities, which immediately leads to the question of which of these categories the Supreme Court of the Russian Federation referred to the digital currency. It seems that of the objects listed in art.807 of the Civil Code of the Russian Federation, it has the greatest similarity with money.

Most Russian and foreign researchers also point out that cryptocurrency acts as a payment method in international business transactions ^{[14, p.62],[15],[16]}.

Thus, there is an abstract possibility to classify cryptocurrencies as means of payment, but this will become possible only (and if) after changing approaches to legal regulation, contained primarily in Federal Law No. 259-FZ. This is not possible now for two reasons. Firstly, according to Article 1 of the said law, in relation to cryptocurrencies, there is no person who is obligated to each owner of digital currencies (electronic data). The exception is made by operators and (or) nodes of the information system, whose duties are not related to the property rights of the owner of the cryptocurrency, but are more organizational in nature (ensuring compliance with the procedure for releasing these electronic data and performing actions in relation to them to make (change) entries in such an information system to its rules). Secondly, article 14 of the same law explicitly prohibits the offering of digital currency to an unlimited number of people, as well as goods (works, services) for the purpose of organizing the circulation and (or) circulation of digital currency (paragraph 8).

Conclusions

Summing up, it should be noted that in the current legislation there are no such categories of objects of civil rights that fully correspond to the characteristics of a digital currency, and to which it could be unconditionally attributed. Other authors hold a similar position ^{[17, p.115]}. The existing uncertainty, reinforced by the categorization of cryptocurrencies as "other property," only raises questions and hinders the formation of a homogeneous law enforcement practice. The need to define the legal regime of digital currencies is noted by many researchers ^{[18, 70]}. This need is partially realized by the introduction of an intermediate type of digital currency - the digital ruble - issued by the Bank of Russia as one of the forms of existence of the official currency. At the same time, the essence of the digital ruble (and it is the essence, not the form of existence, that matters in relation to monetary funds) differs from other cryptocurrencies only in its fiat nature. Central bank digital currencies (CBDCs) contribute to the transition to a global cashless society, so an increase in the share of digital currencies (both fiat and non-fiat) is inevitable ^{[19, 1]}.

It seems that the best way out in a situation where the share of digital currencies in financial markets will only increase will be to amend Article 128 of the Civil Code of the Russian Federation and present it in the following wording: "... other property, including property rights (including non-cash funds, including digital rubles, non-documentary securities, digital rights and digital currency); ...", as well as the addition of Chapter 6 of the Civil Code of the Russian Federation with Article 141.2 "Digital Currency". At the same time, it seems necessary to amend the wording of Federal Law No. 259-FZ regarding the admission of digital currency turnover within the limits established by law.