Finland might have been known as a country that carried an indifferent attitude towards cryptocurrency, but that’s changing. Earlier in the year, Finnish banks began to block transactions from major crypto exchanges in the wake of Bitcoin’s price drop and mounting taxation issues. Now, with Bitcoin’s value sinking further, the Bank of Finland has launched an astonishing attack in the cryptocurrency market. In a paper headlined “The Great Illusion of Cryptocurrency”, the Bank of Finland has declared digital currency as a “fallacy” in a scathing statement.
Feeding the Fallacy
The controversial paper is the work of Aleksi Grym (Head of the Digital Central Bank and Digitalization Advisor), who certainly hasn’t censored his words. In the text, he uses cryptocurrency and its fundamental nature to explain “how poorly understood the concept of money itself still is today”, along with how social media and the internet have blurred the line between fact and fiction. What Grym attempts to propose is that cryptocurrencies aren’t real currencies, instead he believes that they are “accounting systems for non-existent assets.”
It’s his opinion that even the technology behind cryptocurrencies – such as Blockchain – is nothing more than a glorified bookkeeping system. “For all intents and purposes, that ledger is a centralized ledger. The fact that there are multiple synchronized copies of it, distributed across a network, is irrelevant, as each one has the same data,” Gryms says.
Making Use of Tired Arguments
Negativity is at the center of Grym’s report, which is unsurprising given the sources he appears to base his opinion around. He cites various studies that openly bash Bitcoin as a bubble, with the usual – and now routinely debunked – “lack of fundamental value” argument being rolled out. Grym also attacks the possibility of a central bank ever choosing issue a digital currency as well.
What readers of the report are likely to find is that Grym spends a lot time asking “what is money?”, as he believes that the concept of it has consistently morphed over time. The problem with the paper is that a lot of what Grym has to say boils down to the age-old “store of value” theory. This argument against cryptocurrency adoption is known for being loose at best, so his decision to create a Bank of Finland-backed paper around it has led to huge amount of criticism within the crypto sphere. While Grym might say that crypto is “unrelated to the fundamental characteristics of money,” many prominent sources tend to disagree.
Rebellious and Risky
His most questionable statements – and there is a fair few of note – relate to the uses of Bitcoin. Grym feels that the main reason for owning cryptocurrency is for criminal reasons. He said that it has a rebellious nature at its core, to the point where people feel that it’s a commodity that stands against “real or imagined” state oppression. He even went as far as to say that trading cryptocurrency was like “toys, fashion, art, club memberships, or firearms.”
Negative – borderline sensational – reports related to cryptocurrency aren’t uncommon, but the Bank of Finland’s latest publication will likely raise more eyebrows than most.