7 min read

Crypto Exchanges& Regulation in Sweden

Top exchanges in Sweden by Coincub criteria
Article review author
Jonathan Lea
Sweden head image

Crypto Country Rating: 8.0/10

9/10
Institutional acceptance
Very positive. Government looking at e-Krona
9/10
Exchanges & Wallets availability
All leading names with high presence and access
9/10
Government regulation
Government looking embrace cashless society
6/10
Defi acceptance
Government looking to adopt some of its advantages
6/10
Financial services
Leading institutions open to some forms of crypto services
9/10
Transparency
Personal data collection, government tracking, high regulation
8/10
Spending crypto
Has well-established outlets and services
8/10
Banks activity in crypto
Leading banks actively looking to trial and promote crypto services

Bitcoin and cryptocurrency trading in Sweden

Sweden may have been in pole position when it comes to considering the rollout of a central bank digital currency – or eKrona, but things have quietened on the digital front lately with no new ground being explored in terms of cryptocurrencies. The CBDC isn’t a cryptocurrency, merely an efficient way of using the blockchain concept to perform the role of a central bank-approved issued currency. Sweden has strong all-round scores on our crypto rating, from numbers of bitcoin nodes and population owning crypto, but mining is a big black cloud on the horizon, Having so much energy consumed by mining does not sit well in Sweden despite its high mining score. Sweden slips on our ranking due to lack of impetus, one way or another,

The Riksbank, like other central banks, has therefore taken the view that crypto-asset is a better name than cryptocurrency. There are also crypto-assets that are not created to act as means of payment. Many crypto-assets use so-called blockchain technology where each transaction is signed and recorded in a “ledger” as a chain of transactions. Often this is done by a network of computers that all have a copy of the ledger (a “distributed ledger”). This makes crypto-assets very difficult or impossible to counterfeit. A CBDC could also be based on this type of technology.

“Stable coins” is the name of a group of crypto-assets designed to follow the value of another asset type, for example, a national currency such as the US dollar. The issuer will then hold an amount of US dollars in a reserve and issue a proportional amount of stable coins. One example of a stable coin is the crypto-asset Diem, which Facebook plans to launch.

The characteristic of a CBDC such as the E-krona is that it is issued and backed by a state/central bank. An E-krona would be issued by the Riksbank and appear on the Riksbank’s balance sheet in the same way as banknotes and coins. The E-krona would also be expressed in Swedish kronor, and not be a new currency of its own. This means that it would be covered by Riksbank’s legal obligation to strive for an inflation target and thereby stable development in the purchasing power of the krona. For crypto-assets, there is no state that has these responsibilities.

Many national supervisory authorities, such as Finansinspektionen (in Swedish) in Sweden, have issued warnings about the risks associated with crypto-assets. Most crypto-assets are for example not regulated and therefore lack consumer protection. In September 2020, the European Commission presented a proposal on a new regulation governing crypto-asset trading. If the regulation becomes law, crypto-assets will be regulated within the EU.

Sweden has a positive attitude towards crypto and blockchain technology that runs from the top-down, with an openness to a cashless future and numerous crypto trading and spending facilities.

Law and crypto trading in Sweden

Legal - existing crypto legislation

Bitcoin and other cryptocurrencies are recognized and accepted by the Swedish government as legitimate, but the exact classification as to their status, i.e. a currency or a good, is subject to debate. Sweden is pretty laid back about crypto and its regulatory body, the Swedish Financial Supervisory Authority recognizes cryptocurrencies as a legitimate form of payment even though it is not recognized as a currency as such. In fact, the Swedish Enforcement Agency even auctioned off some bitcoin it had seized from a resident as compensation for a tax debt!

Legal - forthcoming crypto legislation

New laws and classifications relating to crypto are continually being debated along with the trialing of a digital Krona, so it’s worth checking on the latest news to see how any changes will impact your activities.

Taxing cryptocurrencies in Sweden

Income Tax

Tax is a subject never far away from bitcoin and other digital currencies. Put simply, any crypto that you purchase as an investment is treated as capital property and the gains and losses you realise on them are either income taxable or deductible. Just for the record the current average income tax rate is at 32% and keeping false records could earn you a hefty Swedish fine.

Tax relief

The position on VAT on crypto was not so clear cut for a long time until the Swedish Administrative Supreme Court ruled that bitcoin and similar cryptocurrencies are not subject to VAT – a decision backed by a judgement from the European Union. For trading, capital gains tax is applied to cryptocurrency at a flat rate of 30% and losses are deductible for up to 70%.

Tax when moving residency

If you are a long-term resident of Sweden you are probably deemed a permanent resident for tax purposes. If you are not a permanent resident, and your holdings are outside of Sweden you’ll fall under the required tax laws of your adopted country.

Tax on mining

The Swedish Tax Authority published a guideline on how it would view and tax mined bitcoins and other virtual currencies and concluded that mined coins are generally tax exempt.

Crypto financial services in Sweden

Fin services - retirement planning

Most retirement and pension funds worldwide deem cryptocurrencies to be too volatile to become part of long-term retirement schemes. There is little certainty on this at present.

Fin services - banking

Cryptocurrencies are openly discussed and widely understood right from the top down. The government is trialing the possibility of digital Krona and that involves the Swedish Central Bank.

Fin Services - DeFi

Decentralized finance grew rapidly in 2020. The Bank for International Settlements estimated back in 2018 that Sweden is the world’s most cashless society – used as a percentage of gross domestic product. The government is looking to leverage some of DeFi’s advantages, but nothing is clear yet.

Using crypto in Sweden

Article step image 1
Spend

Spending all your cryptocurrency in Sweden is a lot easier than in many other countries and Sweden is increasingly open to its use.  The country is some way ahead, including bars and retail outlets and the usual global brands such as Starbucks and Microsoft. Sweden is also considering a move to a digital currency and its central bank is trialing a pilot project to introduce an electronic Krona based on blockchain technology.

Article step image 1
Gifting crypto

If you’re feeling generous, gifting in Sweden is tax free and that includes giving away crypto. However, similar to lost or stolen crypto, you can’t deduct gifted crypto from your profits. Also, if you receive crypto as a gift you’ll only pay tax on it when you come to sell it.

Crypto regulation in Sweden

Security

Both bitcoin and ether are traded as exchange-traded notes (ETNs) on the Swedish Stockholm Nasdaq Exchange allowing for speculation in the cryptocurrencies in the same way as speculations in gold or oil. As usual, home-based exchanges and services may offer more customer support and recourse in the event of a problem, but overseas-based exchanges may offer a wider choice of services and more competitive rates.

Transparency

As with many government bodies, the Swedish tax authorities can request information from crypto exchanges and get it, so your dealings can be made transparent. Exchanges need to provide the Financial Authority with information and keep a record of its transactions and need to register in accordance with the law.

Helpful?
FAQ

New to crypto? Here’s our guide!

FAQ Image #1 01 Why Bitcoin? It seems like the buzz around Bitcoin just keeps growing. Bitcoin is a constantly evolving technology with a passionate community. What is it about the digital asset that makes it such a controversial topic and attractive investment?
FAQ Image #2 02 How to Get Started with Bitcoin It can be difficult to get past the technical jargon surrounding bitcoin (BTC) and other cryptocurrencies in order to figure out how you can buy and store them. Beginners can purchase Bitcoin, for example, on many exchanges using fiat currency like U.S. Dollar, Euro or British Pound.
FAQ Image #3 03 Blockchains 101 Blockchains are a type of database where data is stored in blocks that are chained together. As new data comes in, it is entered into a block, which is then chained to the previous block. The Bitcoin blockchain serves as a ledger that records every Bitcoin transaction in history.
FAQ Image #4 04 Bitcoin in the Real World Ok - you’ve found an exchange, bought your Bitcoin, and stored it safely. What’s next? By now you can buy just about anything with Bitcoin if you try hard enough, from Amazon gift cards to an old master painting. You can also convert your BTC to fiat with ATMs, an exchange, and more.

What people say about us

Aayush Bhatnagar JIO - Senior Vice President

Coincub is a novel crypto exchange aggregator that helps investors to compare different exchanges before taking their decision.

James Gillingham Co-Founder and CEO at FINXFLO

The most comprehensive analysis I found. Have a look, you might be surprised.

Jonathan Knegtel CEO Blockdata

Coincub looks dope! Nice one!