Difference between e-krona and crypto-assets

An e-krona, if it becomes a reality, would be issued by Sveriges Riksbank and have the same value as banknotes and coins. Crypto-assets, on the other hand, should not be seen as currencies, but rather as a form of financial asset.

The Riksbank monitors and analyses the development of crypto-assets as part of our task of promoting a safe and efficient payment system.

There is still no established definition of crypto-assets, which are often also called crypto-currencies or virtual currencies. The primary reasons why crypto-assets are not money is that these assets lack an official issuer and do not function like a normal means of payment. For instance, crypto-assets have difficulty maintaining a stable value.

The decisive difference between crypto-assets and established currencies like the Swedish krona is that the latter are actively managed by central banks that have been given overall responsibility by law for ensuring that the monetary and payment systems function in practice and are sufficiently flexible to meet the needs of society.

With regard to the crypto-assets, there is no one with overall responsibility for them. Central banks are also representatives of states or a union of states, as in the case of the European Central Bank. This means that these currencies can be regarded as issued by the state, unlike crypto-assets, which have no official issuer.

Bitcoin is the most commonly-used crypto-currency

According to coinmarketcap.com, there are currently more than 1,700 different crypto-currencies, most of which are very small. Bitcoin was launched in 2009 and is the most commonly-used crypto-currency. It is used for payments between individuals on the Internet and in some online shops. However, it is likely that most owners of bitcoin do not use them as a means of payment, rather as an asset that is expected to increase in value. Bitcoin does not have an individual issuer, but is created by its user network. Participants who pool their hardware resources to verify the payments made are rewarded with newly-created bitcoin. The idea is that the users can anonymously make on-line payments independent of governments, banks and other institutions.

So far, all available data indicate that the use of virtual currencies is very limited, in terms of the number of users, the number of transactions and also the value mediated. During 2017, the daily number of transactions in bitcoin around the world has been on average approximately 275,000. This can be compared with between eight and nine million card transactions per day, just in Sweden.

This limited use means that any positive effects are very minor, as are the possible negative effects on financial stability and the safety of the payment mechanism.

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Updated 18/10/2018