In the Swedish municipality of Staffanstorp, municipal lawmakers reach a brief truce on the use of cryptocurrencies.
Staffanstorp Municipality in Sweden has consented to do crypto research. By April 20, 2022, all lawmakers have agreed to this. The municipality has a strong economy and an investment portfolio of more than SEK 500 million (about $55 million). The municipality’s investments include fixed income and securities. The municipality is now considering crypto assets as a means of risk diversification. According to Christian Sonnesson, head of the municipal board, it is not about holding bitcoin.
“We expect we may receive offers concerning this in the future and want to investigate now in order to be better read.” I believe that many people should embark on a voyage of knowledge, after which everyone can make their own evaluation.” Crypto funds, which track the value of cryptocurrencies, will be used to make investments.
The opposition leader, Pierre Sjostrom, concurred but raised concern about the dangerous nature of cryptocurrency in light of the fact that tax funds will be used.
If the probe turns up positive, it’s uncertain if the Local Government Act will allow it. “Municipalities and regions must manage their funds in such a way that requirements for good returns and satisfactory security can be met,” the Act stipulates.
Sonnesson argues that people avoid cryptocurrency because they are afraid of the unknown. He hopes to be the country’s first municipality to invest in cryptocurrency. Being first, however, is not an end in itself. “I would have loved for everyone to have a closer look at it,” he says. It’s also not about owning bitcoin.
Staffanstorp’s suggestion has been accepted by Annika Wallenstom, head economist at the Swedish municipalities and regions. “If you don’t want to take any risk at all, you might not get a return either,” she explains.
A pilot program for e-Krona is in the works.
According to a senior financial official in Sweden, bitcoin trading is “like trading in stamps,” and money not issued by a central bank will fail.
Swedes have been gradually weaning themselves off of banknotes and coins. Riksbank has been looking at the possibility of launching a digital version of the national currency, specifically the e-krona, which would give access to state-issued money, although in a digital form. This year, the bank will conduct additional research, pilot test the technical application for the e-krona, and compare various technology options for the e-krona.