Riksbank Deputy Governor: Bitcoin Is Not Money, But an Asset

January 27, 2018

Riksbank Deputy Governor: Bitcoin Is Not Money, But an Asset

Bitcoin and other cryptocurrencies are not a very good version of money, because they are inherently volatile, said Cecilia Skingsley, deputy head of Riksbank. She believes that cryptocurrencies can not act as an effective store or value or a medium of exchange, and therefore should be considered assets, not money.

She told CNBC:

"In my view, cryptocurrencies, bitcoin and the others — the way I've seen them so far — they don't meet the criteria to be called money."

Skingsley explained her point of view:

"They can be called an asset, fine, but they are not a very good version of money because it's not a very stable store of value where they fluctuate a lot. And it's not a very efficient medium of exchange because you don't buy your groceries with bitcoin."

She thinks that a certain version of money can be considered good if it is a reliable store of value and are in demand within the country or a currency union. 

Sweden is a country with an extremely low amount of cash in the economy. In fact, it is so low, that the government is considering the possibility to make a complete transition from paper krona to an electronic one. The project is called e-krona

Skingsley said that Sweden will release e-krona if there is enough demand within the country for such a payment method. She noted that the concept of this project is "far away into the future", and Riksbank is still undecided whether to use blockchain technology in this development. 

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