Norway's government chimes in on Bitcoin, says it doesn't fall under the usual definition of money

By on December 16, 2013, 1:00 PM
money, bitcoin, virtual currency, currency, norway

As Bitcoin continues to grow in popularity, it’s no surprise that we are also hearing a number of governments around the world chime in on the matter. The latest country to speak out (negatively) on Bitcoin is Norway, Scandinavia’s richest nation.

Nans Christian Holte, Norway’s director general of taxation, said the currency doesn’t fall under the usual definition of money. Instead, government officials have deemed Bitcoin as an asset in which capital gains tax can be charged and that profits from Bitcoin will classify under the wealth tax. We are told that losses can be deducted, however, so it’s not all bad.

The decision will likely have an impact on Kristoffer Koch, the Norwegian man we profiled back in October. Four years ago, Koch was working on a thesis paper about encryption and decided to buy 5,000 Bitcoins for (now) bargain price of $27. That stash is now worth more than $3.6 million at today’s (rather low in recent days) exchange value of $734.

The future of virtual currencies in general is unknown but there’s huge potential if things go right. As BI Norwegian Business School professor of financial economics Paul Ehling told Bloomberg, if people start to trust Bitcoin and use it for large purchases, it could easily rival existing currencies. Problems could arise, however, in times of crisis or during a power outage where having cold hard cash in your wallet would be the best course of action.

Need a quick lesson on the history of Bitcoin? This handy infograph from Visual Capitalist should do the trick.




User Comments: 4

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spencer spencer said:

They can say whatever they want; it's a currency. It may be fiat but the value is in the system the ability to transfer currency without taxes or account fees and allows people to do so discreetly and securely (until the fed uses some insane technology to decrypt the network)if even possible...this system will always have value. It's not up to the government what currency people use. Would you rather pay to deposit U.S. dollars while their inflating or use this currency rising in value that is secure and free to use with no paper trail?

1 person liked this | cliffordcooley cliffordcooley, TechSpot Paladin, said:

It's not up to the government what currency people use.
And at the same time, they will not allow a currency to grab traction without taxation. It is not the currency they care about, it is the lack of taxation they care about.

spencer spencer said:

And at the same time, they will not allow a currency to grab traction without taxation. It is not the currency they care about, it is the lack of taxation they care about.
Whats the difference from a robber and government? France even has a tax rate of 100% for some people. Maybe a robber could steal your car but not your entire salary.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

Whats the difference from a robber and government?
Very good question, one of which I don't have the security clearance to answer. LOL

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