DOI: 10.46340/eppd.2025.12.5.3
Vladyslav Gniezdilov
State Institution “South Ukrainian National Pedagogical University named after K. D. Ushynsky”
How to cite: Gniezdilov, V. (2025). The Impact of Virtual Asset Regulation on the Balance of Domestic and Foreign Policy: the Dimension of National Security in the European Space. Evropský politický a právní diskurz, 12, 5, 48-51. https://doi.org/10.46340/eppd.2025.12.5.3
Abstract
The article highlights the timeliness of researching the institutionalization of the virtual assets (VA) market, particularly cryptocurrencies, and its transformation from a niche technological innovation into a significant factor in international relations and public policy. It emphasizes that virtual assets challenge the state’s traditional monopoly on money issuance and control over financial flows, creating new threats to national security. In response, governments are compelled to develop comprehensive public policies that lie at the intersection of competing interests. The study argues that this conflict of interests is especially acute in the European space, where the European Union, through the Regulation on Markets in Crypto-Assets (MiCA), seeks to establish uniform rules that will have global implications.
The purpose of the article is to determine how virtual assets influence the balance between domestic and foreign policy priorities of states and their role in ensuring national security within the European space. According to this purpose, the research sets the following objectives: to demonstrate that public policy on cryptocurrency regulation represents a point of convergence between internal and external political interests; to show that domestic policy in this area aims to protect consumers and combat crime; and to argue that in the sphere of foreign policy, this direction serves as a tool of geopolitical influence and protection of sovereignty for European states, thereby strengthening collective national security.
Thus, the political science conceptualization of cryptocurrency regulation is examined not as a technical or economic matter but as a strategic security task, in which the state must balance the competing imperatives of domestic innovation and external security. Regulation of virtual assets is no longer optional but has become a critical component of state policy. A successful balance between domestic (economic development) and external (security and sanctions) priorities will determine the resilience of the state in the new digital reality.
Keywords: state, EU, national security, regulatory policy, cryptocurrency, virtual assets, European space, domestic policy, foreign policy, MiCA, FATF.
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