Why Russian Sberbank and VTB CEOs both criticise Bitcoin.

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Top Russian bankers explain why they dislike Bitcoin after Tinkoff’s CEO said that the central bank was prohibiting the company from offering cryptocurrency trading services.

Sberbank and VTB, Russia’s two largest banks, are not planning to enter the cryptocurrency market in the foreseeable future because their CEOs feel it is either too hazardous or phoney money.

Sberbank CEO Herman Gref said that cryptocurrencies like Bitcoin (BTC) are probably the riskiest type of investment alongside the equity market. In a Thursday interview with local TV channel NTV, Gref claimed that a banking deposit is the best investment option as it is associated with the least amount of risk despite low returns:

“A banking deposit is certainly the most reliable investment instrument. 100% reliability but unfortunately not very high profitability.”

Andrey Kostin, the CEO of VTB — Russia’s second-largest bank — went even further, arguing that crypto is “fake money.” In a Friday interview with Bloomberg, Kostin said:

“We don’t like Bitcoin. We think it’s like making fake money. Somebody’s sitting somewhere mining and mining like in the Middle Ages and then using them.”

Kostin expressed optimism that central bank digital currencies will supplant crypto, noting that private banks were originally “a little concerned” about handing the Bank of Russia complete control over money.

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“The banks were a little bit concerned that the central bank would take their business but I think we’ve found the solution that actually customers will stay with the banks while the cryptocurrency will be controlled and issued by a central bank,” he said.

It is somewhat unsurprising that the aforementioned CEOs are opposed to private digital currencies, given that the Russian government — itself not a big fan of cryptocurrencies — has significant shares in both Sberbank and VTB.

Despite consumer demand, Oliver Hughes, CEO of private digital bank Tinkoff, revealed yesterday that the Bank of Russia will not allow it to begin crypto services.

 

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