Putin: Cryptocurrency Is Backed by Nothing
RegulationBit News Today2 min read
Russian President Vladimir Putin has repeated his previously stated position that cryptocurrency is "backed by nothing". Speaking at an economic forum this week, he emphasized his view that cryptocurrencies are not equivalent to fiat currencies and have serious risks. ## Putin: Cryptocurrency Is Different to Fiat
The Russian leader spoke at an economic forum. He explained that state-issued fiat currencies, like the US Dollar, are supported by the actions of the government and their economy. The government can stabilize the value of fiat by implementing fiscal and monetary policies, controlling inflation, and maintaining a balance of payments.
In contrast, cryptocurrencies are decentralized digital currencies. They do not have the support of a government. As a result, their value is determined by market forces like demand and supply, competition, and speculation.
Putin described this as giving cryptocurrency a "very undependable nature". He suggested that cryptocurrency prices could fluctuate wildly and be driven by speculation. ## Putin: Cryptocurrency Is Backed By Nothing
Putin used straightforward language to express his view that the lack of fundamental asset backing is the core weakness of cryptocurrency.
He stated: "What are they supported by? The fact that someone else is ready to purchase them. That is what supports it right now, nothing more, and this is why I say, they have a very undependable nature".
The statement reflects a view that cryptocurrency is fundamentally different to other forms of money, and that its value should not be compared to government-backed fiat. ## Putin: Cryptocurrency Investment Has Risks
Putin's statement also came with a warning that cryptocurrency investment is risky. He said: "We must make sure the people understand this...That there is no state support, that this is not money that is guaranteed by the state, that it is in no way the equivalent of sovereign fiat currencies, of the currencies of the government." ## Russian Cryptocurrency Regulation
Putin's comments come at a time when the Russian government has been debating new regulations for cryptocurrency.
Last month, the State Duma approved a bill that would allow banks and other institutions to invest in cryptocurrency. However, the bill has not yet been signed into law.
The Duma has been debating a separate bill on cryptocurrency regulation for several years, and it is yet to be approved.
