A BRIEF economic commentary has been released by the central bank of Sweden –Sveriges Riksbank – regarding the role of digital currencies and the influence they have on the retail payment commerce.
The report underscores the fundamental principles behind digital “money” commonly referred today as “bitcoin”. It also discusses other popular digital currencies like litecoin and dogecoin.
The report also tackles the impact of bitcoin in Sweden and how its central bank has embraced its use and other so-called “cryptocurrencies”
The Sveriges Riksbank report discovered that the use of digital currencies in the country remains very limited.
Bank officials disclosed that it is especially hard to get precise details with regards the use of digital currencies in different geographical locations, the reason that a huge number of studies are commonly limited to the actual value and its worldwide appeal.
The Sveriges Riksbank report attempts to put Sweden in one corner and look deeply into dealings exclusively to the Swedish currency (the krona (SEK) exchanges. Even so, the data may not be complete, as it only deals with transactions involving SEK.
Based on the report, around 212 bitcoins per day on average were converted to or from SEK from December 2012 to May 2014 at an average value of only over SEK 266,000.
However, the daily value changed substantially between SEK 2,500 and SEK 2.5 million, depending on the exchange rate and the number of bitcoins being exchanged.
The authors warn that the statistics along are not conclusive as there is no sufficient proof on transactions between private entities and other movements of funds that could be relevant.
Though the report contains the normal set of caveats included in most bank statements that pertains to digital currencies, it also has some positive commentary.
The report also disclosed that digital currencies are among many innovations in Sweden’s payment markets and like other innovations, digital currency is essentially positive:
“It can contribute to meeting new payment needs and to making payments more affordable and more secure. Those who choose to use a particular payment service can be expected to do so because it gives them an added value in relation to other payment services.”
The report further stated that cryptocurrencies may also be very ideal for micropayments made via websites.