Hence, we need to ensure sound regulation and oversight. Network and scale effects are as important as ever. With globalisation, the network effects are moving from the domestic market to the global. Regarding scale effects, I would argue that digitalisation has increased the fixed costs and lowered the variable costs, thereby increasing the large-volume advantage. Next-generation payment systems I will now turn to the present and focus the remaining part of my speech on the work at the Riksbank on developing the current infrastructure – building the payment systems of tomorrow, if I may say so. Naturally, this is not a solo task, but a joint effort involving many stakeholders, public and private, domestic and foreign. I will concentrate, however, on the Riksbank’s rationales for this work. They are to a large extent related to the lessons that I just highlighted. Before I do this, let me briefly reflect on what I said earlier about the higher pace of innovation in recent years. For those in the commercial sphere of payments, this has increased the risk of ‘falling behind’, we often hear. You need to master the new opportunities offered by the ‘era of digitalisation’ to avoid losing market shares. Add to this that network and scale effects tend to benefit suppliers that are first with a new solution or service. Here my point is that the same factor has also led to demands on central banks to be as vigilant as ever.
Over time, this has become a reality almost everywhere. In Europe, countries and their inhabitants have converged on one currency – with the euro area as a special case, of course. In the United States, developments have been similar. The ‘free banking era’ showcased the impossibility of keeping track of the values of notes by different issuers. In the end, they were replaced by Federal Reserve banknotes, and a common currency was established. During our lifetime and in our part of the world, it has been like that – one country, one monetary unit. However, a few years ago, technology started to challenge this, at least conceptually. We are now seeing the emergence of cryptoassets in various forms, without a public issuer, claiming to be money. Yet, most of them vary significantly in value, which means that their purchasing power also fluctuate. Consequently, cryptoassets mainly function as investment assets and not as a means of payment in the way we use, for example, kronor, euros and dollars. One innovation in the crypto world is so-called stablecoins, which are cryptocurrencies where the issuer promises that the value follows the value of another asset, such as dollars. In this way, the stablecoin issuer uses the trust in already established currencies. So far, stablecoins have mainly been used by those active in the cryptoasset market, but there is the ambition to broaden their acceptance as a means of payment.