sverige | Cryptobeyer

Why is the Scandinavian cryptocurrency adoption rate only half of the global level? Here are the fresh facts: only 7% of the population in Sweden, Denmark, and 9% in Norway own cryptocurrencies. A resounding 80% of the population in these countries state that they will never buy crypto! Let’s explore what’s behind the prevailing skepticism of cryptocurrencies in Scandinavia.

On a global level, around 16% of the population owns cryptocurrency, and currently, about 15% of the US population has invested in crypto. Turkey, India, Vietnam, and Nigeria have the highest affinity for crypto. The Chainalysis 2023 Global Crypto Adoption Index shows that 8 out of the top 20 countries with the highest crypto adoption rates are developing countries in Central Asia, South Asia, and Oceania. So, what's the story behind this data?

“It’s a complex interplay between cultural values, economic stability, and a deeply ingrained trust in established financial institutions that explains the low crypto adoption rate.”

I would say that Swedes, Danes, and Norwegians have a cultural ethos steeped in pragmatism and skepticism. Generations have leaned on traditional financial systems and have found comfort in the stability that they offer. They respect conventional banking, and its structure is a part of the broader societal fabric of these nations. Being Swedish myself, I feel that a large part of the population in these countries finds a sense of security and predictability in the traditional financial system. In the face of cryptocurrency's notorious volatility, I certainly understand why there’s caution and skepticism.

Central to Scandinavian skepticism towards cryptocurrencies lies an unwavering trust in established financial institutions, even if they are far from perfect. But we must acknowledge that these nations have long benefited from robust banking systems and regulatory frameworks, fostering a sense of security and confidence among citizens. Let’s be clear: unlike the decentralized nature of cryptocurrencies, traditional banking offers oversight of financial markets, clearer assurances, and safeguards. This inherent trust in institutionalized finance serves as a barrier to widespread adoption of cryptocurrencies among Swedes, Danes, and Norwegians.

“Oops, my crypto was stolen!” Crypto exchange crashes, security breaches, and historic levels of fraud within the crypto sphere undoubtedly reinforce the preference for regulated and secure financial channels. It’s worth noting that all nascent technologies of this magnitude undergo teething problems before broader societal acceptance. Industrial revolutions are, after all, processes.

What's the solution?

I see the potential of the Markets in Crypto-Assets (MiCA) regulation in increasing institutional trust in crypto. That’s where we must start. The Markets in Crypto-Assets (MiCA) initiative seeks to establish a unified regulatory framework for crypto-assets, thereby improving transparency and enhancing consumer protection. In short, MiCA is about to go fully live late 2024 and it aims to instill greater trust among institutional investors.

I believe in a hybrid solution where traditional finance and crypto coexist, and for that, we need a cohesive framework.

I think that MiCA will trigger an increase in institutional investment in the EU crypto market by reducing regulatory ambiguities and creating a more regulated, standardized environment.

Here’s some insider buzz: Major European banks are poised to offer crypto-related services like custody, exchange, and stablecoin issuance within the next few years. I think this is when crypto investing gets the standardization that most Scandinavians need.

Sweden confirms the notion that cryptocurrency mostly attracts young people but is still not crypto-friendly. A fresh 2024 survey conducted by K33 Research and EY shows that 550,000 Swedes, making up 7% of the adult population, have invested in cryptocurrencies. But let’s be clear, despite Stockholm being known for being a Fintech Hub in Scandinavia, crypto is still seen with skepticism. The traditional finance sector is still hesitant to dip their toes into the cryptocurrency lake. Here’s what the new study finds and what’s needed in Sweden.

The study confirms the notion that cryptocurrency mostly attracts young people as almost half of them are under 30 years old, and another 40% between the ages of 30 and 50. Additionally, the study highlights differences in crypto ownership between urban and rural areas, with Stockholm having a higher ownership rate at 10%. It's also noted that those with higher education and income levels are more likely to invest, which aligns with traditional investment patterns.

Another belief that can be confirmed is that men are three times as likely to invest in cryptocurrencies than women. However, there's a silver lining as more women reported purchasing their first coins in the last two years, indicating a potential narrowing of this gap. The survey also reveals that a majority of Swedish crypto owners bought their first coins during the COVID-19 crisis.

The study confirms the joke in the cryptocurrency community that people tend to buy cryptocurrency when the price is high. It’s unfortunate that most people entering the space suffer the consequences of falling prices at their first investment.

But let’s be clear: we are a product of our own actions and volatility is driven by greed.

Looking ahead, there's optimism among Swedish investors, with 20% expressing their intention to acquire cryptocurrencies within the next decade. If these projections materialize, Swedish crypto ownership could amount to 1.6 million by 2034. However, I think it’s a low prediction. I would like to give thanks to K33 Research and EY for conducting this much needed study.

Yes, in Sweden cash is dead and it has entered the realm of digital currencies with the e-krona pilot project and has explored the technical and legal aspects of a digital currency. But, in general, the government is paying little attention to the potential of blockchain technology and cryptocurrencies.

So, what’s needed in Sweden?

Sweden is experiencing a situation similar to many other nations. The entire web3 space needs to focus on improving user experience, effectively working to hinder illicit activity such as scams, and the traditional finance sector should meet with fintech firms and discuss how the technology best can be used for the common good. I hear that the tax authority (Skatteverket) has employed staff who are knowledgeable about cryptocurrency, and I hope traditional finance institutions follow suit. I have yet to hear a positive word about the potential of blockchain technology from the government, even though we are experiencing one of the biggest and fastest technological developments of mankind. I hear from multiple companies that operating a crypto company in Sweden is difficult, and traditional financial institutions and the central bank are clearly hindering the adoption of cryptocurrency. The study confirms the fact that millennials lead the way in cryptocurrency adoption, and I see a need for Sweden to become more open to the potential of blockchain technology for the common good. It’s not just as a circus ride in price volatility.