Bitcoin, the world’s leading cryptocurrency, has certainly entered 2017 flying — the price is 1245 USD on March 14th (according to CEX.IO exchange). The price of the revolutionary digital payment method has already exceeded its all-time record value. Driven by Japan’s apparent warming to the currency, a pending decision over the approval of a BTC exchange-traded fund (ETF), and a greater general acceptance globally, Bitcoin looks set to continue its upward trend for some time yet.
However, certain parts of the world have been less accommodating to Bitcoin and its potential to revolutionize global finance. Until recently, this was to be the case in parts of Northern Europe. Recently though, thanks to a slackening of trading legislation, and a desire from these nations to go “cashless”, things are rapidly changing.
Bitcoin’s History in Scandinavia
Famously, as the soaring price of Bitcoin was making international news for the first time in 2013, the world heard about a Norwegian man who bought a whopping 5,000BTC for the lowly contribution of $26 while studying for a university paper on cryptography. Forgetting about them for years, he was startled to discover in 2013 the coins were now worth considerably more. So much more that he was able to buy himself a studio apartment in an affluent area of Oslo using just a fifth of the total worth of the BTC he had held onto. For many, this was the first time they had ever heard about the mysterious cryptocurrency outside of passing tales of cyber crime and dark web drug lords.
Despite the impressive way the terms “Bitcoin” and “Norway” first found themselves in the same headline, the currency didn’t get off to the best possible start in parts of Scandinavia. Shortly after the initial gold rush, authorities in Finland, Norway, and Sweden were quick to place harsh restrictions on the use of the currency. Deeming it to be an asset, rather than a currency, these countries imposed 25% VAT on transactions, rendering trade and exchange difficult to profit from. This, of course, has stifled BTC’s potential for growth in these jurisdictions. Finland made their stance clear on the matter early in 2014. Peivi Heiddinen, head of oversight at the Bank of Finland in Helsinki, stated that “the law stipulates that a payment instrument must have an issuer responsible for its operation”, classifying BTC as falling short of the requirements necessary to be deemed a currency.
Fortunately, and even before the 2015 EU ruling declaring Bitcoin a legitimate tax-free currency, all of Scandinavia reversed their earlier legal stance on the currency, and people residing there are able to trade in BTC without paying the crippling 25% VAT on gains. This has, of course, allowed the currency to find wider appeal in Scandinavia, with Denmark, and Finland seem particularly welcoming to the idea of cryptocurrency.
There is much evidence to suggest that the Danes enthusiastic about Bitcoins. One of their main political parties even takes donations in the currency, and a major real-estate company accepted payment for a property using BTC last year. There is even talk in the country appointing a “digital ambassador” to liaise with the globe’s technology giants like Apple and Microsoft. This move, intended to create a fertile investment climate for fresh businesses, will certainly excite Danish blockchain and Bitcoin start ups.
Finland have also been busy since their ruling allowing VAT free BTC trade. Their capital (which back in 2013 homed Europe’s first Bitcoin ATM) recently hosted a large annual business expo, Slush, on blockchain technology, and indirectly Bitcoin. Aiming to unite enterprising young start ups with international investors, the choice of theme is indicative of Finland’s wider attitude towards cryptocurrencies.
Despite being somewhat slower off the mark than their neighbors, Norway too seem to have been embracing Bitcoin. In late 2016, one of the country’s largest payment processing services VIPPs launched a feature allowing its customers to buy BTC directly through an App. With developments like these, it’s obvious that, like their neighbors, the once suspicious-of-the-technology nation are now embracing BTC more fully.
Bitcoin’s Future in Scandinavia
So, what of the future of Bitcoin in Scandinavia? It’s no secret that there are strong shouts from the nations of the region for a cashless economy. It’s been estimated that there’s been a forty percent drop in the use of physical cash in Sweden since 2009. Denmark, Sweden, Norway, and Finland have all made efforts to curtail the use of physical money for certain transactions. Some companies are legally able to decline cash payments for non essential services, and certain banks in the region no longer handle cash at all. If a truly cashless society were to be made a reality, there would have to be a serious overhaul of the current, antiquated transfer methods used by fiat banking institutions. This could well be an opening for Bitcoin to help facilitate with transactions.
However, Sweden have also announced their intentions towards a cashless society with somewhat more definition. The National Bank of Sweden recently declared plans to launch Ekron, a form of their own digital currency, with the intention of using it as the country’s legal tender within the next two years. As revolutionary as this sounds on paper (and it really is) for those proponents of Bitcoin, it could prove an dangerous stumbling block. Should Sweden launch their own version of digital currency, then surely it too would be designed provide the same advantages of Bitcoin, if not more. This may render the older cryptocurrency obsolete. Additionally, supposing the Swedish experiment goes well, it seems likely that their neighbors, already keen on the notion of a cashless society, would seek to produce similar digital currency models themselves. This would further limit the appeal of BTC in the region.
Like the early days of the cryptocurrency in Scandinavia, Bitcoin looks potentially precarious in Northern Europe today. However, unlike other parts of the world where it has been demonized outright, countries like Sweden, Norway, Denmark, and Finland seem intrigued by the technology behind the currency. The intentions of Sweden to develop their own digital money certainly show an appreciation of how efficient blockchain technology can be, but show little regard for the vehicle by which this revelation was delivered. Likewise, the Slush startup expo in Finland gave center stage to block chain technology rather than Bitcoin itself. Rather than seeing Bitcoin as an immediate solution to their shortcomings with cash, the evidence may suggest that the Scandinavian nations are learning from the technology behind Bitcoin. If other parts of the world follow suit here, Bitcoin might become the blueprint for future money, rather than the actual money per se.