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Bitcoin

The Swedish Central Bank Does Not Consider Bitcoin To Be A Currency.

May 28, 2022 - Around 2 mins mins to read

Sveriges Riksbank (“Riksbank” for short), Swedish central bank, has gone to Twitter to dispute whether Bitcoin is a currency.

The Swedish Central Bank Does Not Consider Bitcoin To Be A currency.
Source: Wikimedia Commons

According to the Swedish central bank Riksbank’s official Twitter account, Bitcoin must meet three severe conditions in order to be designated a currency: operate as a custodian (store of value), offer a means of payment, and be a unit of account. While the tweets continue to clarify each issue, the central bank eventually concluded that Bitcoin and other cryptos are assets rather than currencies.

Because of its extreme price fluctuation, Bitcoin, according to Sweden‘s central bank, fails as a “value preserver.” According to the bank, currency users should have faith that the item they are about to purchase will remain largely price stable over time.

The bank also questions Bitcoin’s legitimacy as a payment method, noting that “there is no exact figure on how many companies accept Bitcoin” as payment. As a proxy, the bank compares Coinmap’s listing of Bitcoin ATMs — approximately 29,500 worldwide — to Visa, which is accepted by over 60 million shops worldwide.

The Swedish Central Bank Does Not Consider Bitcoin To Be A currency.
The Swedish Central Bank Does Not Consider Bitcoin To Be A currency.

According to the Riksbank, Bitcoin also fails as a unit of account due to its incapacity to act as a store of value or a means of payment. In addition, the central bank points out that governments always price items in their own currency rather than Bitcoin.

“Bitcoin generally does not fulfill the three functions and is thus not money, at least not in the sense that it functions as money in the traditional financial system and in society.” the bank finds. The tweet also applies its logic to other cryptocurrencies, including Ethereum.

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