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He claims that in the past it was precious metals like gold and silver that made people trust the value of money; today, on the other hand, the state is the final guarantor.
However, nothing is static and the State must continually adapt its actions with respect to technological development and the changing needs of citizens. It also includes how we pay.
Now that we are entering a new turn towards the digital society, new needs arise when it comes to being able to carry out transactions. So it is natural that the Riksbank and other central banks investigate the possibility of updating their services to the public by issuing digital money (e-kronor) as a supplement to cash.
At the same time, the private sector has started to introduce new digital payment methods such as cryptocurrencies and so-called stablecoins. One of them is bitcoin.
At first, Bitcoin was seen as having its value in the sense that it would become a currency with a strong international standing as a means of payment. However, belief in this has gradually faded.
One reason is that bitcoin lacks the institutional and legal framework that ordinary currencies have. For money to work as a means of payment, they must be safe and well accepted, it is not bitcoin.
They also need to be efficient: fast in transactions and cheap in terms of costs to society, but bitcoin doesn’t do very well here either.
Today, bitcoin is viewed more as an asset and as a way to hedge against inflation, much like gold. The value of Bitcoin is completely dependent on enough people continuing to trust its value tomorrow as well. And since there is no stable, well-managed economy to support confidence, this goes in strong waves, with huge fluctuations in the value of bitcoin as a result.
“So it is difficult to see that bitcoin could be a particularly good hedge against a possible rise in inflation or a good investment for most people,” he writes.
