Sveriges Riksbank delves into the benefits of digital currency trade

Friday 20 June 2014 13:50 CET | News

The Swedish Central Bank, dubbed Sveriges Riksbank, has issued a brief economic commentary according to which the use of digital currencies, such as Bitcoin, litecoin, altcoin or dogecoin, in the local market may render benefits, reports.

Although Sveriges Riksbank has reported that digital currency use in Sweden is limited and risky, around 212 Bitcoins per day converted into SEK from December 2012 to May 2014 (SEK 266,000 being the average value), the bank has also deemed it as an “innovative” payments system in the local market. It may facilitate cross-border payments, and add reliability and security to current alternative payment methods, the same source reports.

However, the daily value varied substantially, between SEK 2,500 and SEK 2.5 million, depending on the exchange rate and the number of Bitcoins exchanged,” the report notes.

The authors caution that the statistics are incomplete, as there is no data on transactions between private persons and other movements of funds that could be relevant. Therefore, they concede, the exchange statistics may underestimate the use of Bitcoin in Sweden.

Crypto-currencies may also be better suited for micropayments made via websites, the report further notes.
Disadvantages associated with digital currency platforms include the lack of clear regulation, lack of consumer protection regulation, volatility, security risks and the risk of using digital currencies for illicit transactions.

The report concludes that the impact of any innovation depends on how much it is used. The use of digital currencies is “very limited” both in terms of the number of users, the number of transactions and the value involved in said transactions.

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Keywords: Swedish Central Bank, digital currency, trade, SEK, Bitcoin, benefits, crypto-currency, online transfer, iD, accounts
Categories: Payments & Commerce
Countries: World
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