This is a thread on the rubble of a recent paper released by the Swedish central Bank.

Stacker who originally posted the article for our awareness: #30076

The Rubuttal

"Most cryptoassets have so far been used as speculative investments rather than as a means of payment. A reason for this is that they often lack characteristics that we associate with traditional means of payments"

Or you know, because its freaking new

"cryptoassets have low – or no – consumer and investor protection"

My shoes, car, dollars in my wallet, guns in the house, piano, fridgerator etc etc. have no comsumer protection

"and there is a certain degree of anonymity linked to cryptoassets, which means they can be used in illegal transactions."

They've been trying to discourage the use of cash for years, but the thing is, this really just means, no counter party custodies them, so we can't control people

"Many cryptoassets are unbacked"

What would be the purpose of backing gold with another asset? In the same way, what would be the point of backing Bitcoin with another asset?

"It might also be the case that the decentralised characteristics of cryptoassets are valued."

Oh wow, finally a description of the intrinsic value of Bitcoin. So much of this is an attempt to discredit, but this one little leaking admission is worth holding on to. Although I could add more characteristics of the intrinsic value of Bitcoin than that, a final settlement method which can be sent via a transmission medium for example.

"It is common for the term 'cryptocurrencies' to be used to describe cryptoassets. However, the Riksbank finds the term 'cryptocurrency' misleading because it implies that cryptoassets are supposedly a type of money."

Yeah happy Bitcoin Pizza day by the way.

"There are different ways of defining what money is. A common way of defining it is that an asset must fulfil three criteria to be considered money: It must act as a store of value, it must act as a means of payment and it must act as a unit of account. Because Bitcoin is the largest cryptoasset so far, we take this as an example."

Now this I'm ready for

"An asset working as a store of value means that its holder must be able to trust that it is possible to buy about as much for, let’s say, SEK 100 today as it will be tomorrow. The price of Bitcoin has been highly volatile (see Figure 4) and it is thus a relatively poor store of value."

The incumbent payment method has the advantage of sticky prices to justify this logic, but there are certain aspects about the economy that allow a person to see through the veil. For example, housing prices. (source: http://pricedingold.com/us-home-prices/)

Therefore, the incumbent payment system, is not money.

"An asset working as a means of payment essentially means that it can be used for payments; that is, a buyer uses the asset to pay and a seller accepts it as payment....Coinmap, however, has a map service where users can add different merchants that accept Bitcoin directly for payments...As of 13 May 2022 around 29,500 merchants and ATMs worldwide had been added to the map....In El Salvador, Bitcoin has fairly recently been made legal tender...In April 2022, the Central African Republic also made Bitcoin legal tender."

So they kinda just concede this point

"An asset working as a unit of account in short means that it is used to price goods and services....In Sweden, and other countries, prices are set in the local currency and not in Bitcoin."

Here's the thing, the incentive structure to use paper as money, is falling apart. The paper admits that "The other two functions have a bearing on this". The incumbent financial system, being a poor store of value, and with so many barriers to being used for payments (3% Visa fees, unbanked countries, etc.) I do foresee a future wherein as Bitcoin matures, goods and services begin to be priced in Bitcoin.

I don't really feel the need to comment on any of the "DeFi, FinTech, Stablecoin" nonsense so thanks for reading.