Finland’s Central Bank: Cryptocurrencies Are Total Fallacy

July 4, 2018

The central bank of Finland has released a report titled “The Great Illusion of Cryptocurrencies” by Aleksi Grym, the chairman of Digital Central Bank under the Ministry of Financial Stability and Statistics of Finland.

The paper is purposed to focus the readers’ attention on complications with public understanding of the concept of money and convince them to review their stance towards Internet and social networks that “muddled our sense of fact and fiction.”

Grym asserts, cryptocurrencies are “accounting systems for non-existent assets”. To prove this he notes that technologies of distributed ledger like blockchain are nothing but a system of storing records and applying them for digital currencies is “unrelated to the fundamental characteristics of money”:

“For all intents and purposes, that ledger is a centralised ledger. The fact that there are multiple synchronised copies of it, distributed across a network, is irrelevant, as each one has the same data.”

Moving on, the report mentions a number of studies on Bitcoin and some other digital currencies with purely negative summaries that claim them as either having speculative nature or resembling a bubble or lacking the fundamental feature of money.

When giving an answer to his own question “What is money?” Grym writes that despite some changes in definition that occurred over time, their gist remained the same: they must be a means of exchange with properties of storing and account. While cryptocurrencies, as he put it, are out of thin air and cost nothing.

Grym also stated involvement into criminal activities, wish to safeguard oneself from real or imaginary pressure by state, belonging to large community and sensation seeking as the primary reasons to acquire cryptocurrencies.

Remember that quite lately the Financial Stability Committee of Germany’s Bundestag (AFS) has released a report on research that found out digital currencies being no threat for the financial situation within the country.


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