Cryptocurrency In Transition: Tracing The Evolution And Addressing Legal Challenges In Global Financial Systems

Abstract

Cryptocurrency has emerged as a powerful force in the global financial landscape, representing a radical shift from centralized monetary systems to decentralized digital finance. This article explores the evolution of cryptocurrency from its inception with Bitcoin to its expansion into diverse applications such as decentralized finance (DeFi), non-fungible tokens (NFTs), and central bank digital currencies (CBDCs). As cryptocurrency adoption increases, it brings to light complex legal and regulatory challenges that span national borders and traditional legal concepts. The paper delves into the fragmented global legal landscape, examines the emerging issues in regulation—including jurisdictional ambiguity, consumer protection, and the accountability of decentralized platforms—and outlines the necessity of a harmonized regulatory framework. It argues that international cooperation, adaptive legal systems, and clear regulatory definitions are key to navigating the challenges while preserving the innovation potential of the crypto ecosystem. The study concludes that harmonized regulation is not merely desirable but essential for the responsible and sustainable integration of cryptocurrency into the mainstream global economy.