WIthin Europe, the general feel for cryptocurrency is pretty positive. This is a sentiment reflected on both a government and societal level. Communities within Europe are spearheading cryptocurrency adoption movements and are also ensuring that crypto has a real place on the continent. Reports out today however highlight that Finland seem to oppose to this and that actually, The Bank of Finland don’t believe in cryptocurrency one bit.
As a matter of fact, Aleksi Grym, the Head of Digitalisation and the Bank of Finland has referred to cryptocurrency as a fallacy in a recent paper which has been called ‘The Great Illusion of Digital Currencies’.
The essence of this is that Grym believes cryptocurrency is not a form of money because it cannot be used as a unit of account. Moreover, Grym believes that in order to be a money, crypto needs to be backed by collateral, which it is not. Grym even argues that despite cryptocurrency being built to avoid moderation by authorities like banks, actually, intermediaries still exist within the blockchain and that in essence, the whole thing is entirely centralised as a result.
It feels like Grym is missing out a few key points here. Either way though, Grym believes that news and social media are duping the population into thinking that cryptocurrencies are a good idea.
Moreover, according to Finance Magnates, Grym has said:
“What is common to most definitions in the literature is that money is defined based on what it does and not what it is.”
“Grym argues that all the transactions on a blockchain network are stored in centralised ledger. The fact that all within the system have a copy of the ledger and can add to it is irrelevant – these are all copies of a single ledger. Furthermore, he argues, blockchain rewards are no different to banks being ‘rewarded’ for processing payments.”
See the full article for yourself, here.
Grym really does seem to be against the idea of cryptocurrencies and thus we can probably assume that going forward, The Bank of Finland will make way towards banning cryptocurrencies ‘to protect their customers’. Though if this happens, they will see a great deal of resistance from the rest of Europe, so perhaps it isn’t all over just yet?