The currency type Bitcoin can develop in the countries where the money decreases or the financial networks need to be updated. The swedes are separating more and more of the cash. The number of banknotes and coins in circulation fell to its lowest level in three years. Riksbank, the Swedish central bank, estimated that cash transactions accounted for only 15 % of all transactions last year, compared to 40% in 2010.
This situation is related to the development of mobile payment services. This evolution has brought many Swedish banks to ask whether they should introduce a form of purely digital currency.
A phenomenon and growing trend in the world
The main issue for many banking institutions is the introduction of a technology like Bitcoin. Riksbank is not the only central bank to analyze the blockchain technology which allows crypto-currencies to operate. These systems rely on networks of computers, rather than on a central authority such as a bank, to control and record transactions. They are often based on common data.
Central banks around the world believe that this has the potential to replace cash and make other payments systems more efficient.
How to set up such a system ?
The integration of crypto-currencies in the central banks would indeed be ironic, given that the Bitcoin has been created as a way to work around the needs of banks. Beyond that, the idea raises rather complex questions about how these systems should be designed, constructed, and maintained, as well as the way in which they could influence the financial stability of the country or even the planet.
It is for this reason that the Riksbank has conducted an analysis focusing not only on technology, but also on the methods to be used in order to limit the risks.