The growing popularity of Bitcoin has led the governor of Sweden’s central bank to state that the peer-to-peer digital cash system is unlikely to continue escaping regulatory oversight, reported Bloomberg.
“When something gets big enough, things like consumer interests and money laundering come into play,” Riksbank Governor Stefan Ingves told Bloomberg on Monday. “So there’s good reason to believe that [regulation] will happen.”
The form such regulation will take is unclear. However, Sweden’s financial markets minister Asa Lindhagen also joined the conversation, pointing out that the government is in the process of tightening standards for bitcoin and other cryptocurrencies exchanges –– which she called a “work in progress at the international level,” according to Bloomberg.
Lindhagen also highlighted the government’s concern with bitcoin and other cryptocurrencies being used for money laundering, something she sees as a “very important issue” that will require cross-border work. Additionally, the head of Sweden’s financial regulator Erik Thedeen commented that “it’s quite evident that some form of regulation is needed.”
Sweden’s coordinated attempt to regulate Bitcoin becomes clearer when their fiat currency plans for the future are brought to light. The Nordic country is one of the more advanced countries globally to develop a central bank digital currency (CBDC), as Ingves stated in April that Sweden could have a CBDC within five years. Such a move would likely end cash, and the Swedish government does not want bitcoin filling in the void.
Although Sweden can attempt to regulate Bitcoin, the country is unlikely to succeed. Being a decentralized, global, peer-to-peer monetary network, Bitcoin was built to circumvent the scrutiny of national authorities and therefore cannot be entirely restricted. Countries can only regulate the edges of the system, i.e., exchanges and banks that operate around it, but that wouldn’t stop citizens from interacting with and leveraging Bitcoin –– as Nigeria has recently shown.