Russian authorities have of bitcoin use several weeks ago after a  where they effectively banned its use without saying so outright.

Andrei Shamrayev, deputy director of the central bank’s national payment system, said that “in order to equate Bitcoins with securities, it is essential to first of all understand what value a financial instrument represents”, and “[A Bitcoin’s value] is only fixed by the amount of time spent on its ‘mining.’”

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Timur Batyrev, director of the bank’s national payments system, compared the cryptocurrency to a Ponzi scheme fueled by speculative transactions:

“There will be people who are prepared to influence the exchange rate of Bitcoins in order to maximize profits. Chiefly these are people who own a lot of Bitcoins, but there will also be people who will pay for this profit.”

Their assessments have a large degree of truth to them: Bitcoin isn’t backed by any central authority, does not have a direct intrinsic value like silver or gold, and still lacks the degree of widespread acceptance enjoyed by conventional currencies. The comments are contentious mainly in that they relegate its value solely to mining activities. Supporters will argue that the decentralized nature and fixed supply make it for an ideal store of value if/when it gains more legal recognition.

Interestingly, the assessment comes at the same time as the Russian Ruble fell to its lowest value versus the dollar in 5 years, now trading at 35.59 rubles to the dollar. Against the euro, it has actually set a new record low, with 49 rubles now needed to buy one euro.