Swedish bank SEB (Skandinaviska Enskilda Banken AB) placed a sponsored, full-page ad this week in Sweden’s largest online newspaper, Swedish Dagbladet. Written in article format, it was titled “This May be Bitcoin's Fatal Blow.”
Its author, Johan Javeus, SEB's chief strategist, promotes what some on Reddit viewed as a negative stance on Bitcoin. Others saw it as positive, saying that the ad just reveals that the bank is showing a reasonable caution around the cryptocurrency.
The author of the article presents the usual examples of why the bank frowns on the cryptocurrency's use. He says that it needs more stability and increased regulation in order for it to function effectively as a means of payment. He said:
“There is a problem when there is no Governor acting anchor to a currency, to ensure stability.”
The author gives the background of Bitcoin, explaining that it appeared after the financial crisis of 2009, and he calls it a “virtual currency completely outside all systems.” He explains that “Bitcoin has had a bumpy ride,” between the speculation of investors and being thrown a “mean punch,” by those who oppose it.
“Nobody knew what [Bitcoins] were really worth,” he explains, until the first “real” transaction, when someone bought a pizza for 10,000 BTC — or 19 million Swedish crowns at today’s price — which made for an "expensive pizza.”
Bitcoin has a limited “theoretical amount,” so there's a good reason to believe the price will rise, says Javeus. With only 21 million to ever become available, a rise in value “is the trend that investors in Bitcoin today are hoping for.”
Bitcoin's anonymity is a difficult challenge, however, and “can be one of the disadvantages of the currency's future.” He said:
“There must eventually be a legally clarified status of the currency. Frequently currencies in the banking system have the advantage that the transactions can be traced, so then we know where the money is going. It is important, not least for enforcement authorities, so that the currency is not used for money laundering or drug deals.”
He explains that in order for people to buy and sell goods, they have to have trust in the value of Bitcoin. He believes that “enormous fluctuations” in price are the biggest reason why Bitcoin hasn't gained mass adoption. Instead of being a payment method today, Javeus says it's more like an “investment asset” for people who have hopes of it rising in value. However, it has some positive attributes for working well as a payment system. He says:
“What is portrayed as the benefits of this currency is that it is quick to make transactions, you can make a payment in seconds to the receiver, even if the person sitting on the other side of the globe.”
Javeus ends the article stating that “it would be wrong today to calculate it,” and he believes without legal status it won't survive. Like most in the banking industry, he advocates for regulation in the digital currency market, claiming it is necessary for consumer protection. These regulatory guidelines will help a great deal, he says, “if the currency is to become really widespread in the future.”
One thing is certain. When huge banks take out ads to discuss Bitcoin, they reveal the value of their concern.