Bitcoin

Is Bitcoin (BTC) Mining Another Form of Counterfeiting? This Russian Banking Chief Thinks So

In the cryptoverse mining makes the cryptos go round, in other words it is imperative to the ecosystem of many cryptocurrencies including Bitcoin (BTC). So mining is a norm in the crypto community. However, recently Bitcoin mining was labeled as another form of counterfeiting, and not by just some anti-Bitcoin fanatic, this claim was made by the head of a major Russian financial institution.

Andrei Kostin, who serves as the president and the chairman of the management board of VTB Bank, made this rather tall remark on Bitcoin mining, during an event on Monday, where he said that the person printing digital money to replace the Russian Ruble was counterfeiting the state-backed fiat currency.

The Russian banker doesn’t feel any different about the state-backed digital currencies as well. According to TASS, the Russian news agency, Kostin puts the central bank digital currencies and decentralized cryptocurrencies in the same basket.

I’m not a big supporter of crypto-ruble. For me, this is some kind of counterfeiting. A person who sits and mines is the same as a person sitting and printing money

 These comments came after the Russian Association of Cryptocurrency and Blockchain revealed their plan of launching a state-backed ‘Crypto Ruble’. According to the association the Crypto Ruble will likely be launched in the mid of 2019. Like a few other governments around the world, Putin’s government took these steps in order to circumvent the economic sanctions enforced by the United States.

According to a report of Forklog, a Russian language bitcoin news agency, the government did establish the fact that the new Crypto Ruble would be independent of Bitcoin and be a non-minable asset that would be directly pegged to the real Ruble.

Coming back to Kostin, he also claimed that cryptocurrency did not have an established market to sustain itself in the long run. He is of the opinion that the cryptocurrency phenomena went out of trend owing to its lack of utility. He said,

I think that there was such euphoria at first. Everyone thought that tomorrow everything would be calculated in cryptocurrencies. But it is not happening yet.

And his words could be true considering the fact that 2018 was one of the longest-running bear cycles in the history of cryptocurrency market. However, crypto enthusiasts are still holding on to the hope that 2019 will yield better results for the crypto market following regulators’ attempt to regulate the market and make it more suitable for large investors.

But apparently Kostin believes that all those efforts will not yield a lucrative outcome. He was quoted as stating,

There are a lot of negative factors. I’m not talking about the fact regulators consider cryptocurrency dangerous from the point of view of money laundering, terrorist financing, etc. Today, both the Fed and the ECB regulate the cryptocurrency market with monetary policy instruments. But, in the long run, it would be impossible. There is no mechanism for regulating the cryptocurrency market. The potential threat is, if this market, while small, becomes a city of the dominant.

 For further updates stay tuned to BlockPublisher.

Abeer Anwaar

Abeer holds a Bachelors degree in Media studies and covers blockchain startups for BlockPublisher. An optimist, excels in the art of the written word and swears by the joy of all things sweet. Contact the editor at editor.startups@blockpublisher.com

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