Central Banks and Bitcoin – A Journey Around the Globe

While the Bitcoin is currently climbing undreamt-of heights beyond the recently astronomical 15,000 US dollars, there is not only euphoria and a gold-rush atmosphere, but also doubt, scepticism and fear of the next uncontrolled tulip around the crypto currencies – especially on the part of state authorities and central banks.

If one asks governments, state institutions and authorities, there is anything but consensus on how to proceed with the emerging economic power beyond conventional control. On the contrary, depending on where you look on our planet, there is a patchwork of government responses instead of a unanimous tenor.

To regulate or not to regulate – that is the question

And the guardians of the world economy are divided. While some market powers want to rule, crypto currencies deny the status of money, do not even see themselves as responsible or consider the monetary risk to be too low, others are taking a blow. With the regulatory lasso, they want to bring the digital currencies back into the safe hands of the authorities.

The following overview takes you on a journey around the globe. It should provide an overview of the global situation and – without claiming to be exhaustive – reveal differences in government approaches.

Part 3 of our journey around the globe leads us to those states that believe they can recognize the potential of crypto currencies and want to use them for themselves.

The hopeful ones

The top dog and world leader of the Blockchain implementation Estonia shows himself to be a great advocate of crypto currencies until the end. Bitcoin & Co. do not need to fear regulation in the Baltic States. Rather, the Estonians are inspired and strive to publish their own crypto currency, the Estcoin. The director of the Estonian e-residency programme, Kaspar Korjus, proposed such a digital currency in August. This would allow Estonian citizens to authenticate digital documents from anywhere in the world.

But this was promptly contradicted by ECB President Mario Draghi shortly afterwards. His argument: there must be no parallel currency in the EU to the euro. The Estonians’ enthusiasm for crypto currencies, however, may not have caused much cloudiness – the Estcoin website still exists today and, as their latest blog post suggests, the Estcoin idea is far from buried.

Similar to Estonia, Sweden refrains from central bank intervention. Rather, the country’s central bank is enthusiastic about its own use. Since 2015, the Scandinavians have been making plans to become the world’s first cashless country.

In this context, the country’s responsible central bank, the Riksbank, is currently investigating various ways of issuing a digital currency and how this can be implemented technologically.

Apart from crypto currencies, Sweden and Estonia are also among the pioneering countries in terms of further blockchain use. It has been known since 2016 that Sweden is researching a blockchain solution for its land registry entries. Its final test phase was successfully completed at the end of May this year.

Like its neighbour Sweden, Norway is currently not only waiving the regulation of Bitcoin. In the land of fjords, too, hopes are pinned on its own cryto currency. For example, the Norwegian central bank is currently investigating the possibility of issuing a digital payment alternative. This was announced in May by Jon Nicolaisen, deputy chairman of Norge Bank, in a letter from the Norwegian Academy of Sciences on the current differences between conventional money in bank accounts and the increasingly rapid spread of digital currencies.