Swedish central banker: "Bitcoin is not money"

Bitcoin and other virtual currencies are not a good variant of money due to their high volatility. That Said Swedish central banker Cecilia Skingsley in a conversation with Bloomberg at the World Economic Forum.

In an explanation, she says that virtual currencies are not an efficient way to store value or to transact with them and that they therefore do not meet the definition of money. Instead, she says, virtual currencies should be considered a form of possession.

"Virtual currencies are not a good variant of money, because they are not stable due to price fluctuations. It's also not really an efficient means of payment, because you can't buy groceries with a bitcoin."

The Swedish central banker referred to the historical development of money since the era of the golden and Silver Coins and concludes that you can only speak of money if it is generally accepted and if it is a stable store of value. This is not yet the case with virtual currencies, because due to the large price fluctuations, they are still more attractive to speculators than to savers.

Central banks struggle with virtual currencies

The Swedish Riksbank is not the first and certainly not the last to speak out about virtual currencies. In fact, the Swedish central bank has even considered developing its own virtual currency as an alternative to coins and banknotes, which is becoming less and less widely used due to the improvement of electronic payment systems. However, it is not expected that this e-krona will be released in the foreseeable future.

"We are seeing a rapid decline in the value of all coins and banknotes in circulation and as a central bank we are neutral on this. We believe that people should be able to choose the payment method they find safe and efficient, as long as they are safe and efficient. If we come to the conclusion that there is a need for a digital version of cash, then we will look at what conditions it must meet."

According to Skingsley, the concept of an e-krona is still far in the future and the central bank has not yet made a decision on whether blockchain technology will be used for it at all.

The blockchain technology ensures that all transactions within the network of users can be checked and that there is no central party that processes all transactions. It is precisely this aspect that makes virtual currencies popular, because it offers the possibility to transfer value to each other in a discreet and secure way without the intervention of banks or other financial service providers.

Swedish central bank: "Bitcoin is not money"