Cryptocurrencies like Bitcoin have been the subject of much discussion at the recent World Economic Forum (WEF), particularly with regards to the need for greater regulation in this field.
Commentators highlight that Bitcoin’s price has increased more than 12-fold in the past four years, and the combined market of crypto-assets is now valued at more than $500 billion, leading to some fears that the market is overheated.
However, with smart regulation and further innovation, many believe that crypto-assets could become major long-term players in financial markets.
In addition to Bitcoin, thousands of other digital currencies have been introduced, and blockchain, the technology underlying Bitcoin, carries the potential of providing decentralised, incorruptible ledger, which could be used in a variety of other contexts.
Regulators around the world have raised concerns about the way in which cryptocurrencies make it easy to move money anonymously and therefore possibly aid illicit activities, such as money laundering.
As a result, many nations are seeking to regulate the use of cryptocurrency, but some are also apparently looking to take advantage of the disruptive innovation associated with it. For example, Sweden is apparently considering the creation of its own digital currency, an “e-krona,” which would complement traditional notes and coins.
“Cash is going out of fashion very quickly and digital currencies could provide consumers greater convenience and, potentially, efficiency,” explained Cecilia Skingsley, Deputy Governor of the Swedish Central Bank.
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