28.11.2021

The Governor of the Bank of Sweden compared Bitcoin to stamps. Where is he wrong?

The head of the Bank of Sweden, Stefan Ingves, criticized Bitcoin and said that cryptocurrency can never become an alternative to national currencies that are supported by world governments.

During his speech at a recent banking conference in Stockholm, Ingvas suggested that “private money sooner or later disappears” due to its own collapse.

Note that representatives of banks are most often negative about decentralized assets. For example, in July 2021, the Swiss bank UBS recommended that clients not get involved in the digital asset industry. According to representatives of the institution, as a result, the regulators will “burst” the niche of cryptocurrencies, from which nothing will be left after that.

However, there are exceptions. In August , information appeared that one of the largest US banks, called PNC Bank, would offer its users to interact with cryptocurrencies. That is, in fact, the bank wants to become an intermediary in the acquisition of coins.

What’s wrong with Bitcoin?

Along with criticism, the head of the Bank of Sweden did not rule out that cryptocurrency can really make many people rich. Here is his point of view, in which the banker shares his vision of the situation.

Of course, you can get rich trading Bitcoin. But this is more like a trademark exchange.

That is, in this way, the head of the Bank of Sweden called the cryptocurrency useless on a global scale of the world and only for those associated with this industry. We disagree with this point of view. First of all, BTC and other cryptocurrencies allow you to send value to a resident of any country without the permission of officials and centralized bodies. And this feature alone is enough not to consider Bitcoin as a “brand”.

This is not the first time that the head of the Central Bank of Sweden has touched on the issue of cryptocurrencies. In early June, he announced that Bitcoin has become a fairly widespread phenomenon , so now he cannot avoid constant attention from financial regulators. That being said, Ingves did not forget to mention the negative features of the cryptosphere, such as fraud and money laundering.

According to Cointelegraph , Ingves ‘ radical attitude towards Bitcoin did not stop the country’s central bank from developing a national digital currency called e-krona. The project is still working in test mode on the proof-of-concept algorithm from the Corda decentralized solution developed by R3.

The head of the Central Bank of Mexico Alejandro Diaz de Leon also does not see something too extraordinary in Bitcoin for the development of the economy. In a recent interview, he stated that the country is unlikely to follow in the footsteps of El Salvador, where BTC recently became legal tender. Here is his quote on this matter.

If someone receives bitcoins in exchange for a good or service, this transaction should be classified as barter, because in this case, the exchange of goods for goods takes place. In fact, this is not buying something for money.

Head of the Central Bank of Mexico Alejandro Diaz de Leon

In other words, the banker does not consider BTC to be full-fledged money, so the adoption of cryptocurrency in Mexico does not seem possible for him. Leon also made an important remark about the volatility of Bitcoin: the asset changes in price too often, and its active introduction into the national economy is fraught with negative consequences.

People don’t want the purchasing power of their wages to rise or fall by 10 percent day by day. In this matter, volatility is a disadvantage, that is, Bitcoin is not a good option for preserving value.

Note that in this case, representatives of the classical financial system focus on the fall in the Bitcoin exchange rate, but for some reason they forget about its ability to grow. Even taking into account the current value of BTC, which is far from the maximum, the rate of the cryptocurrency is still 337 percent higher than it was a year ago. And this is more than any banking product for investment offers.

Bitcoin price chart for the last year

As you can see, many more financiers in large world organizations are distrustful of Bitcoin. Its legalization in El Salvador will now become a marker of success for the entire digital assets industry – if the country manages to profitably realize the potential of cryptocurrencies, it is quite possible that other states will soon make it a legal medium of exchange on their territory. And then digital assets will definitely await massive adoption.

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