Head of Russia’s Second Largest Bank Compares Crypto Mining to Counterfeiting

February 5, 2019
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The head of VTB compares crypto mining with printing fake money, says crypto will have a very small market niche in the future.

Andrey Kostin — the head of VTB, Russia’s second-largest bank — has compared cryptocurrency mining with counterfeiting, major Russian news agency TASS reports Monday, Feb. 4.

While speaking to students who participated in an educational contest organized by major Russian tech corporation Yandex, Kostin said:

“I am not a big fan of the crypto ruble. To me, this is a kind of counterfeiting. A person who is mining [cryptocurrencies] is similar to someone who is printing money. During the initial euphoria, everyone thought that everything can be paid in crypto starting tomorrow, but it hasn’t happened so far.”

Kostin believes there will be a relatively small market niche for cryptocurrencies in the foreseeable future, for as the global financial industry is getting more and more transparent, offshore holdings are gradually disappearing.

Moreover, the banker believes that there is no relevant way to regulate the crypto area in the same way that the traditional markets are regulated. If cryptocurrencies become dominant on the financial markets, it can be dangerous, Kostin concluded.

However, the board chairman at VTB, Olga Dergunova, does not share Kostin’s stance. In June 2018, Dergunova claimed that VTB was potentially ready to work with digital assets. Moreover, she said that they could be treated on an equal basis with fiat in the near future.

As Cointelegraph previously reported, the demand for cryptocurrencies in Russia is allegedly very high, but the banks are not able to meet it due to the lack of clearly defined regulations. During a closed-door meeting in September 2018, several Russian banks including Sberbank, Alfa-Bank and VTB reportedly expressed their interest in crypto.

Russia’s cryptocurrency and blockchain legislation, which had passed its first reading stage in March 2018, has since been sent back for further edits. At the end of January, the chairman of the upper house of the country’s parliament urged legislators to expedite their work on the digital economy bills.

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