In a document titled ‘Have virtual currencies affected the retail payments market?’ author Björn Segendorf who works in the Financial stability Department of the Riksbank says that the retail payments market has begun to change in recent years, due to various innovations and new participants like Bitcoin and others.
He writes that virtual currencies that come in many different forms and are often intended to be used for on-line payments have huge potential to replace the traditional payment system. Moreover, as the digital currencies are getting a lot of media attention despite their limited use and reach, a lot of potential has yet to be explored.
The document also reveals that Bitcoin and other similar digital currencies have not made any impact on the Swedish payment system; however, they can contribute to meeting new payment needs and to making payments cheaper and more secure. The focus of the document was not limited to Bitcoin but some other altcoin such as litecoin and Dogecoin as well.
The author of the document says that he found that the use of Bitcoin and other similar digital currencies in Sweden remains very limited. A major reason behind the scant use of cryptocurrencies in Sweden according to the author is that it is hard to obtain them. Only few businesses in the country accept Bitcoin – around 25 Swedish companies are accepting it.
The report says that on average; around 212 Bitcoins per day were converted to or from SEK during the period December 2012 to May 2014 at an average value of just over SEK 266,000. However, the author says that the daily value varied substantially, between SEK 2,500 and SEK 2.5 million. This dramatic change was due to the fluctuating exchange rate.
Cryptocurrencies are Innovative and Fulfilling a Function
The author says that virtual currency is one of many innovations on the Swedish payment market and fulfills a function. There are various facets in Bitcoin and other similar digital currencies that are helping out the users and that way it is not just innovative but essentially positive. It is being used to meet the new payment needs.
Nonetheless, making payments cheaper and more secure, cryptocurrencies are adding value in relation to other payment services from PayPal or Bank transfers. For instance with Bitcoin cross-border payments have been made simpler, faster and cheaper.
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