Riksbank, Sweden’s central bank, is taking a serious look at Bitcoin. As cash use plummets and the amount of currency in circulation dwindles, central banks are looking to cryptocurrencies as government-backed money.
In Sweden, the number of banknotes and coins in circulation has fallen to its lowest level in three decades. Riksbank estimates that cash transactions made up only 15 percent of all retail transactions last year. That number is down from 40 percent in 2010, thanks in large part to massively popular mobile payment services. That leaves the bank wondering if a technology similar to that of Bitcoin’s could be implemented in Sweden.
Riksbank isn’t the only central bank taking a serious look at blockchain, the technology that makes Bitcoin and other cryptocurrencies run. These systems, also called distributed ledgers, rely on networks of computers, rather than a central authority like a bank, to verify and record transactions on a shared, virtually incorruptible database. Government bankers across the world believe this has the potential to replace cash and make other payment systems more efficient. – Technology Review
Riksbank is investigating not only distributed-ledger technology (which it describes as unproven yet “progressing incredibly rapidly”) but also traditional, centralized accounting methods for its “e-krona” (pdf) project. Many central banks are looking into this type of currency, but Sweden appears to be at the forefront of the movement.
According to Rod Garratt, an economics professor at the University of California, Santa Barbara, a cryptocurrency that’s available to all consumers “opens up a whole host of issues” and would pose new challenges for makers of monetary policy.
First, there’s the question of who, exactly, should verify the transactions and maintain the distributed ledger. Even if that’s solved, the new system would be, in a sense, too streamlined, making it easier for bank runs to occur in a moment of crisis or panic. In most current financial systems, large-scale withdrawals of funds are naturally slowed by the time it takes for a central bank to produce the paper money people are demanding. But if the currency is purely digital, no such brakes exist—a panicked citizenry could empty their accounts almost instantly, leaving an entire country’s banking system all but penniless.
A new journal article (pdf) published by the Bank of International Settlements, a kind of central bank for central banks, suggests a more straightforward approach than trying to use cryptocurrency to replace cash. In the article, Garratt and Morten Bech, a researcher at the BIS, draw an important distinction between a “retail” cryptocurrency like FedCoin and a “wholesale” one that would only be used by banks. –Technology Review
China’s central bank has also begun testing of a digital currency. Speeches and research papers from officials at the People’s Bank of China show that the bank’s strategy is to introduce the digital currency alongside China’s renminbi. But there is currently no timetable for this, and the bank seems to be proceeding cautiously.
But the main issue for governments is that they are losing their grip and control on currency. Sweden’s dwindling cash usage is increasing reliance on mobile payment systems risks marginalizing people who don’t use them or can’t access them. Those systems are also run by private companies, which means that commercial forces, rather than government policies, could end up determining how effectively the financial system serves people and the economy.
Interesting, all of the articles proclaiming the end of the world/start of revelation/planet x etc on sept 23 seemed to have vanished off this site.
Is that due to the fact its now Sept 25 and nothing happened…. again?
Yeah, what was up with the big bad wolf coming out on the 23rd of this said month?????? WTF, come on with all this shit talk.
But golly gee guys – The world DID end on Saturday. We’re all now just spooks in the machine ala the Matrix. I do wonder though just where Nibiru or whatever it is called happens to be at the moment. I mean …. I voted for the SMOD (Sweet Meteor of Death) and feel rather let down at his absence. That and the Christian Broadcasting Network is now desperately trying to fill time-slots that they’d not scheduled because there wasn’t supposed to be a ‘now’ now.
(repost from above)
In fact you are probably 1000 times more likely to be robbed using electronic currency than just using cash. I have NEVER been robbed of my cash, I HAVE been robbed of card tard currency 3 times. Power out, no problem I HAVE CASH, atm not working?, no problem I HAVE CASH! Internet down and can’t buy anything with cards? No problem I HAVE CASH! Bank error or lien on my account? No problem I HAVE CASH! Lawsuit or judgement freezing an account? No problem I HAVE CASH! Want to buy something in private or from a private person? No problem I HAVE CASH! GOD WHY CAN’T PEOPLE GET IT THROUGH THEIR HEADS? Ok that’s all I have to say lol….
Hows the cashless thing working out in Puerto Rico? Think about it.
They are up shit creek because there is an epic shortage of cash and virtually no one is accepting cards lol.
No Nibiru. No Jesus. Rocket Man and the Dotard still stirring the pot. How about a war?
McCain and the neocons trying to give the Kurds their own country. They want Syria, BAD.
Yeah but I still see no proof that the Earth is a globe. Where is the proof? Not one actual photo exists.
Just like the bin Laden death photos. It’s a mystery.
The soldier that shot him said he hit him in the forehead and that his facial features were hard to make out anyway. aljamo, this pic was from before all the fancy digital effects came to be so I believe it. ht tps://www.nasa.gov/multimedia/imagegallery/image_feature_1249.html There is also a million dollar dune buggy free for the taking somewhere, you have to just go pick it up.
I know the earth is round because if you look out the window of a plane you can see the curvature, and besides the physics of days, nights, seasons prove it. Just have to think about it.
Marcus and CC, some more date-setters just got egg on their faces. Nothing serious, LOL.
I still use cash for most of my transactions. When cash gets banned that’s when I stop participating.
Don’t be silly. You have guns and ammo. Start robbing like the brothers do.
What is WRONG with Sweden??? Are they insane? I am part Swedish,speak Swedish, worked for a Swedish company, but this country has gone utterly insane.
Amount of currency in circulation dwindles. That’s what ive been trying to tell folks. Its not paper dollars. Its digital money created out of thin air.
I wish to comment on the dwindling use of cash in Sweden, as I live there.
Most banks no longer accept cash, nor give you cash. A few local banks still handle cash.
ForEx bank in Sweden is the major cash transaction bank. But it is not part of SWIFT. But offers banking services since 2003.
ATMs are dwindling in numbers as well.
In addition you will be asked to give documentation where you aquired cash if you want to make a cash depositit at Forex Bank. I had to provide documentation for as low a sum as 8000 SEK, which is less than $1000!
Use of cash is most likely being used by individuals like me, who are willing to accept the added hassle for the sake of anonymity and the belief that cash is important.
“These systems….verify and record transactions
on a…virtually incorruptible database.”
Wow! Virtually incorruptible, huh? When did this happen? Why don’t Microsoft, Equifax, etc. have these?
I smell something fishy here…
Riksbank needs to swap around a couple letters:
it sounds a lot more like RISKbank to me!
The sad little bankers. We can see your difficulties in stealing all the peoples wealth. And now you want to make it easier to steal what little you have left us with. Cash use is down because people have no money. Electricity will never be as ubiquitous as hard currency. Stupid bankerses, always after my preciousss.