
Alexander Thor
3K posts


















Here's how dire the currency situation is in Sweden. Even the best macro people in the world haven't looked at the fragility of what's going on in Swedish crown settlements. Background: 1) This Swish app is used by 8m+ of Sweden's 10.5m or so eligible citizens. The Swish app has become the system of transaction as physical Swedish crown has moved to mostly digital. 2) Sweden's central bank, the Riksbank, took over the Swish app earlier this year from Sweden's private banks. The plan is to fully move the transaction rails to custody of the Riksbank RIX-INST away from the Bankgirot private network run by the private Swedish banks. 3) This last decade's decline in circulation of physical crown/move to digital-for-everything has been partially responsible for the devalued the Swedish crown relative to the euro/dollar. This is not the primary factor, of course, but it's an accelerant. 4) Given 3), the move to the Riksbank clearinghouse away from the private banks' Bankgirot 2) will give the Riksbank greater control over transactions in the Swedish crown. --- Now here are several problems. --- 5) The Swish app, which holds Sweden's currency together, is a piece of crap on the back end. This bucket leaks arb constantly and the Riksbank won't be able to keep up with it like the private banks could through Bankgirot. It's so bad. This Swish app that holds together a sovereign currency by processing a plurality of transactions isn't be guaranteed to work during: -lunch -dinner -on the 25th of the month, when many Swedes are paid their monthly wages When a bunch of Swedes take lunch break and ping the POS systems at restaurants or cafes with Swish within the same hour, the ability to actually run transactions through the system is compromised. Same at evening commute/dinner time. Same on the 25th of the month when everyone gets paid and spends their money on stuff. They built this app that holds their whole currency system together like it's something from the bottom half of a Y Combinator cohort. These are very low transaction volumes per day, just a few single digit millions of transactions at max running through Swish. The population is not that big. And the app can't handle it on the back side. Instead Swish is adding front end features like scanning bar codes, which they debuted to merchants and consumers just this last week. I have zero faith that any of this is being taken seriously. In fact, I think that if many Swedes knew their Swish app, which is effectively their currency at this point, is held together by glue, they'd panic. Also, the Riksbank RIX-INST was only debuted in 2022 to handle settlements off hours not handled by their main system, now differentiated as RIX-RTGS. I am not confident that moving Swish to RIX-INST is going to go well compared to the private banks' Bankgirot. RIX-INST was built by lowest bidders. One DDoS attack on Swish lasting just a few hours can crash Sweden's currency, especially if on the 25th of the month, when payments volumes spike in Sweden. It's that fragile. Even better, lately Swedish employers of lower income and workplace staffing jobs have been starting to use a service called Cappy. Instead of running payroll more often, Swedish employers give their employees an opportunity to take out money against their future paychecks, all paid out through Swish. There is one chokepoint in the entire Swedish economy and it's the Swish app. And the Swish app can't guarantee transaction processing during lunch time, dinner time, or on the 25th of the month.





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