The Swedish central bank will not consider Bitcoin a currency

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The Swedish central bank, otherwise known as Sveriges Riksbank, recently analyzed Bitcoin (BTC) to determine if the queen coin can be classified as a currency. He stated that to be so he must meet three criteria, namely: store of value, means of payment and unit of account. No reliable store of value The central bank has indicated that Bitcoin is not a reliable store of value due to its volatile nature. It reads: “If an asset serves as a store of value, you need to be sure you can buy about the same amount today for, say, 100 Swedish kronor like tomorrow. Bitcoin’s price has had a high level of volatility and therefore is a relatively poor “protector”. ” The Riksbank also indicated that, despite being accepted as a means of payment in a limited number of places, BTC is not as widely accepted as credit cards: “If the asset serves as a means of payment, a buyer must be able to use the good to pay and a seller must accept it as payment. There is no exact figure on how many companies accept Bitcoin as a means of payment, but Coinmap has a service that maps several Bitcoin-accepting merchants and ATMs where Bitcoin can be purchased. On 13 May 2022 there were about 29. 500 merchants and vending machines on the map. In comparison, Visa cards are accepted by over 60 millions of merchants “. Guilt of volatility The central bank also stated that Bitcoin cannot be used as a unit of account due to ever-changing prices. It stated the following: “If the asset functions as a unit of account, it can be used to value goods and services. The above two characteristics come into play since it is more difficult to price something if the value of the asset fluctuates a lot or if it is not used as a means of payment. Bitcoin does not meet 3 criteria to be a currency Finally, he indicated that since Bitcoin does not meet the above three criteria, it is only considered as an asset but not as a currency: “Bitcoin generally does not perform those three functions and is therefore not a currency, at least not in the sense that it can function as money in the traditional financial system and in society. Similar reasoning can be applied to many other cryptocurrencies “.

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