Payments Report 2024

The digitalisation of payments is a global trend

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New types of digital assets are being developed

Published: 14 March 2024

Digitalisation has led to the development of new types of digital assets. Cryptoassets, or cryptocurrencies, such as Bitcoin have been around for many years and have become increasingly popular for speculative investments. However, they are rarely used for payment. In the Riksbank’s survey on payment habits, 2 per cent of respondents stated that they have paid in Bitcoin or another cryptocurrency in the past 30 days.

Another type of cryptocurrency that has received a lot of attention in recent years is so-called stablecoins. They are a kind of cryptocurrency intended to maintain a stable value over time, often by being pegged to a national currency. This sets them apart from many other cryptocurrencies that fluctuate freely, such as Bitcoin.

Stablecoins have primarily been used as a means of payment in the crypto world, i.e. on a different technical infrastructure to the traditional financial infrastructure. When trading other cryptocurrencies, it is also common for payment to be made in stablecoins.

Stablecoins issued on well-established platforms can be widely distributed

In recent years, companies with large platforms and many users have taken an interest in stablecoins. In 2019, for example, the Libra Association (now Diem Association) announced that it would issue a stablecoin on Facebook’s (now Meta’s) platforms. However, the plan was never realised. In a more recent example, last year the company PayPal launched a stablecoin linked to the US dollar. Unlike many other stablecoin issuers, PayPal targets a broad audience and areas of use including everyday payments. It is also an established player in the payments market with an existing infrastructure and a large customer base. Their stablecoin therefore has the potential to be widely distributed.

Widespread use of stablecoins may pose risks

If many people were to start using stablecoins for everyday payments on a large scale, there could be risks. In particular, the effectiveness of monetary policy may be reduced if the public makes extensive use of stablecoins pegged to other non-domestic currencies. The risks of stablecoins are discussed in more detail in the box “PayPal’s new stablecoin” in Financial Stability Report 2023:2.

The risks associated with stablecoins can be addressed through regulation, and there are international guidelines on how to design such regulation. However, the United States, for example, lacks regulation of cryptocurrencies at the federal level, which has been highlighted as a problem by the European Central Bank, among others. In the EU, there is a new regulation, the MiCA Regulation, which addresses the risks of stablecoins by, for example, limiting the extent to which stablecoins can be distributed in the Union. You can read more about the MiCA Regulation in the box “New rules can contribute to payments market objectives” in Section Are payments in Sweden accessible?.