Sweden eyes entering the Bitcoin ‘digital arms race’

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Two members of Sweden’s parliament, the Riksdag, have proposed that the country investigate establishing a strategic Bitcoin reserve to tackle inflation and diversify its holdings.

They also want the government to promise it won’t change the legislation governing the monetary policy of Sweden’s central bank, to show it doesn’t intend to introduce a digital central bank currency.

In their proposal to the Riksdag on Wednesday, Swedish Democrats Dennis Dioukarev and David Perez said, given other countries like the US are already in the process of creating a reserve, Sweden should “participate in this digital arms race and join the growing group of nations that have accepted and recognized the potential of Bitcoin.”

Similar to the US, Dioukarev and Perez have floated the idea of funding the reserve through seized Bitcoin, but said the decision on which authority will manage the Bitcoin (BTC) is an “open question,” for now.

Sweden doesn’t have any publicly listed Bitcoin holdings, according to Bitbo. However, in November 2024, the country introduced a law allowing authorities to confiscate luxury items, including crypto, even if they aren’t the target of an investigation.

Source: Jan3Advocates for Bitcoin strategic reserves have speculated that nation-state-level treasuries are the next step to making Bitcoin the global reserve currency and the standard monetary unit.

Swedish Democrats have influence in the government

The right-leaning Swedish Democrats received the second largest number of votes in the 2022 general election, with more than 20%, and are a key player in backing the current ruling coalition of the Moderate party, Liberals and Christian Democrats, giving them some influence over the minority government.

Dioukarev and Perez said in their Bitcoin proposal that in building a strategic Bitcoin reserve, Sweden is positioning itself for a potentially “disruptive shift in the global financial infrastructure.”

Swedish Democrats Dennis Dioukarev and David Perez want the government to establish a Bitcoin reserve. Source: RiksdagThey argue that a Bitcoin reserve alongside Sweden’s currency and gold reserves, which are tied to “political, geopolitical and economic risks,” would act as a protection against any unrest around the world that would otherwise affect standard reserves.

“In contrast, Bitcoin's value is not driven by the monetary policies of individual states or any specific economy, which can reduce the overall correlation in the reserve.”

A signal that Sweden is open to innovation

At the same time, Dioukarev and Perez said “owning Bitcoin signals that a nation is open to digital innovation.”

Company database platform Tracxn lists 85 companies operating in the Swedish crypto sector, including 20 that have collectively raised $48 million in venture capital and private funding

The top five crypto companies operating in Sweden include an exchange and a cold wallet developer. Source: TracxnOn a practical level, Dioukarev and Perez argue that a reserve would act as protection against inflation, due to its 21 million supply cap, transaction speeds being faster than those of fiat, and the coins’ costs being “negligible” in comparison.

“Bitcoin is currently the world’s sixth largest asset, on par with silver and larger than global companies such as Tesla, Meta and Amazon,” they said.

“Despite this, Bitcoin is only at the beginning of its journey, and it remains to be seen exactly what role Bitcoin will play in the economy.”

Dioukarev and Perez aren’t the first Swedish lawmakers to push for a reserve. In April, Swedish MP and deputy leader of the Centre Party, Rickard Nordin, issued an open letter urging Finance Minister Elisabeth Svantesson to consider adopting Bitcoin.

Related: Swedish health firm raises $10M to buy Bitcoin, stock jumps 45%

Bitcoin is legal in Sweden, and crypto ATMs are operating in the country. The Swedish Financial Supervisory Authority regulates exchanges and enforces Anti-Money Laundering and Know-Your-Customer regulations.

No CBDC in Sweden

Along with the proposal for a Bitcoin reserve, Dioukarev and Perez want the government to promise it won’t change the definition of legal tender in the Riksbank Act, which governs the monetary policy of Sweden’s central bank, Sveriges Riksbank, to show it “doesn’t intend to introduce a CBDC

Sweden already operates primarily through digital money alternatives, with most people relying on the mobile payment app Swish for payments. The country’s central bank also launched a CBDC pilot project in 2020, with its final report released in March 2024, which declared it’s “ultimately a political decision,” whether to introduce it or not

The Human Rights Foundation, which unveiled a CBDC tracker in November 2023, cites improved payment efficiency and expanded financial inclusion as potential benefits of CBDCs.

Drawbacks are listed as the currency’s potential to infringe on privacy and open up new avenues of government corruption, among other concerns.

Magazine: US risks being ‘front run’ on Bitcoin reserve by other nations: Samson Mow

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