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The chairman of VTB Bank, a major Russian financial institution that sees the government as its majority shareholder, has compared the mining of bitcoins with counterfeiting.
Andrei Kostin, who chairs and heads the board of VTB Bank, said on Monday at an event that anyone who prints digital money to replace the Russian ruble infringes the fiat. According to the Russian news agency TASS, the 62-year-old banker also said he placed the central bank's digital currencies in the same basket of decentralized crypto-currencies, adding that:
"I am not a big believer in crypto-ruble. For me, it's a kind of counterfeit. A person who sits and mine is the same as a sitting person and printing money. "
The comments followed the announcement by the Russian Cryptocurrency Association and Blockchain of the launch of a state-supported Crypto Ruble by mid-2019. The Putin government took these steps to circumvent US economic sanctions. Meanwhile, he had established that Crypto Ruble would be an unrelated Bitcoin badet that would be directly tied to the real Ruble, according to a report by Forklog, a Russian news agency, Bitcoin.
No takers for cryptocurrencies
Kostin also established that crypto-currencies had no established market for long-term preservation. He presented crypto-currencies as an outdated phenomenon because of its lack of utility.
He added:
"I think there was such a euphoria at first. Everyone thought that tomorrow everything would be calculated in cryptocurrencies. But that does not happen yet.
By the end of 2018, the cryptocurrency market had established one of the earliest bear cycles in its history. During the negative trend, the capitalization of the cryptographic market, which included the valuation of the best coins like Bitcoin and Ether, had lost a third of its value. According to statistics, the cryptographic crash of 2o18 was worse than the famous Dotcom bubble of the late 1990s.
Enthusiasts in cryptography turned to 2019 for better results following the regulators' attempt to regulate the market and make it more suitable for large investors. However, Kostin felt that all these efforts would not yield any desired result because of the intrinsic nature of crypto-currencies.
He stated:
"There are a lot of negative factors. I am not talking about the fact that regulators consider cryptocurrency to be dangerous from the point of view of money laundering, terrorist financing, and so on. Today, the Fed and the ECB regulate the cryptocurrency market with monetary policy instruments. But in the long run, that would be impossible. There is no mechanism to regulate the cryptocurrency market. The potential threat is, if this market, though small, becomes a dominant city "
Gray area for crypto
As press releases on Bitcoin continue, the cryptocurrency sector as a whole remains largely unregulated under the Russian Federation. In November 2016, the Federal Tax Service of Russia declared that bitcoin was "not illegal". However, in September 2017, the director of the Russian central bank, Elvira Nabiullina, said that bitcoin was not equivalent to money, which meant that people do not digital currency to buy or sell goods and services.
Russia's telecommunications regulator banned the websites of the bitcoin market in 2017.
In 2018, the cryptography sector in Russia underwent a major change as lawmakers decided to define a new legal framework for their sector. In May, a law on cryptocurrency and blockchain pbaded the reading stage by the Russian parliament. However, it was returned for further modifications.
In January 2019, the Speaker of the Upper House of the Russian Parliament asked legislators to speed up their work with a view to drafting a bill on crypto-regulation.
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