Everything You Need to Know about Cryptocoins in ScandinaviaAugust 16, 2020
Cryptocurrency has taken over the world. The advantages of cryptocurrencies are numerous, ranging from greater stability to improved control over your money.
Unlike regular currencies, crypto is not subjected to political influences and other similar factors. As the popularity of cryptocurrencies has evolved, these coins have made it to different parts of the world.
Scandinavia is not the exception. In this post, we are going to focus on crypto in Scandinavian nations. Read on to learn more.
Cryptocurrency in Norway
Believe it or not, of all citizens of European countries, Norwegians are the most optimistic about cryptocurrencies. One research showed that 73% of Norwegians believe crypto will still exist in 10 years. However, they don’t think it will necessarily be Bitcoin. For the sake of comparison, only 57% of UK citizens shared this belief.
Although it may seem so unusual that Norway has the highest hopes for cryptocurrencies, this revelation is more reasonable than we think.
You see, Nordic countries are well-known for high rates of technology adaptation. They are passionate about technology, startups, and new ideas that make these societies so advanced.
It’s very popular already
Many Norwegians already own crypto, and half of them have already used it for transactions and other non-speculative purposes.
Despite the high hopes that Norwegians have, it wasn’t always an easy ride for cryptocurrencies in this country. Back in 2013, the Norwegian Financial Supervisory Authority issued a warning against cryptocurrencies.
They did the same in again in 2018. Both warnings came as a result of warnings by the European Supervisory Authority. The issue, both times, was the supposedly risky nature of these digital assets.
While the Central Bank of Norway still hasn’t recognized cryptocurrencies, it doesn’t prohibit its staff from owning or investing in them.
Even though cryptocurrencies are not banned in Norway, nor are they heavily regulated, the government is still trying to keep a close eye on them.
Taxes on cryptocurrency in Norway
When it comes to paying tax, Norway treats Bitcoins as capital property. So, if you hold Bitcoin, you need to report it to relevant authorities, disclose the amount you have, and specify the amount you make by trading on a monthly basis.
Hoping to become a crypto-friendly country, Norway issued a law that exempts cryptocurrencies from VAT tax.
When discussing cryptocurrencies in Norway, it’s impossible not to mention Liberstad. Liberstad is a private city in Norway. What makes this smart city unique is that it adopted cryptocurrency City Coin as its sole medium of exchange for the payment of city services and workers’ wages.
Cryptocurrency in Sweden
In terms of cryptocurrency adaptation, Sweden is similar to other countries in the region. However, they’re working on going one step further with their own cryptocurrency.
You see, the Riksbank, Sweden’s central bank, has announced the launch of a year-long pilot project called E-Krona, the digital version of their currency. The goal was to create a state-backed digital currency that could have a similar role the cash has today. All this is in an effort to create a cashless society, a popular idea in Sweden.
When it comes to the legislative aspect, Sweden doesn’t have a specific regulation that deals with cryptocurrencies.
That being said, various agencies have issued reports, statements, and preliminary judgments on how they interpret cryptocurrencies and their relation to laws in this Scandinavian country.
Taxes on cryptocurrency in Sweden
Since trade in Bitcoins is a financial service, the Swedish Financial Supervisory Authority has decided that Bitcoins are subject to its authority.
Just like in Norway, if you trade with Bitcoins in Sweden, you are expected to report your activity and calculate tax accordingly.
Yet another similarity between Norway and Sweden in this aspect is the exemption from VAT tax. The future of VAT exemption on cryptocurrency in Sweden is somewhat blurry.
The Swedish Central Bank has outlined more than once that Bitcoin is risky and not subject to any compensation policy from the government.
Cryptocurrency in Finland
Although technically not a Scandinavian country, bur rather a Nordic country, it’s still useful to address cryptocurrency in Finland. Like many other countries in the area, or worldwide in general, Finland does not have a specific list of rules and regulations that focus primarily on cryptocurrencies.
That said, the financial regulating body in this country has warned the public about the potential risks that these assets might have. Despite these warnings, cryptocurrencies are still popular in this country.
No tax legislation in Finland
While there is no legislation on cryptocurrencies pending in Finnish parliament, one thing that goes smoothly is tax collection. You see, when transferred to another currency, the rules on taxation of capital gains apply. When the currency is utilized to pay for goods or services, it’s treated as a trade, and the resulting increase in value is taxable.
Cryptocurrency in Denmark – no regulation yet
Like its neighbors, Denmark doesn’t have a specific set of laws that regulate cryptocurrency. That hasn’t stopped government-related agencies from issuing statements about these digital assets.
For example, Denmark’s Financial Supervisory Authority has declared that Bitcoin is not a currency and that this agency will not regulate it.
Although agencies don’t really consider Bitcoin a currency, the reason behind that is not the lack of willingness to accept them.
The laws in this country, like in many others, didn’t anticipate the risk of cryptocurrency, and therefore rules mentioned there can’t apply to the new digital assets.
However, Denmark is believed to be crypto-friendly, and the cryptocoins enjoy great popularity there.
Similarly to other nations, in Denmark, you need to report your trade and gains made from it. Crypto payments have a VAT exemption.
Scandinavian countries are considered crypto-friendly, especially Norway, where people have high hopes for these digital assets.
While at this point, no laws focus on cryptocurrencies only, we can expect that to change as these digital assets become more and more popular.
Despite the lack of legislation on this subject, you’re still expected to pay tax and disclose your trade details.