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Hunger for bitcoin grows in Scandinavia as regulatory approach evolves

(@dannybradbury) | Published on October 22, 2013 at 15:00 BST

This week sees perhaps Scandinavia’s biggest bitcoin event yet. The Stockholm School of Economics (SSE) will host a conference discussing the future of the cryptocurrency, and 250 people have reportedly signed up. Just how healthy is the Scandinavian bitcoin community?

The Scandinavian region (encompassing Sweden, Denmark and Norway) is seeing its fair share of action, both from regulators and from startups.

Michael Grønager, COO of Payward (which is the company behind Kraken), is located in Denmark, which also plays host to bitcoin payment processing firm BIPS. That country has its own exchange, Bitcoin Nordic, and the Danes are also organizing the pan-Nordic bitcoin conference, on 28th November. Even some politicians are serious about it; the Liberal Alliance party, which has nine parliamentary seats, is now accepting bitcoin donations.

Sweden has the Safello exchange, along with Kapiton, and mining hardware firm KnC Miner is there.

In Norway, Coincloud is hoping to launch a bitcoin-based cloud storage service, while bitcoin exchange Justcoin is running a zero trading fee promotion that will last until the end of the year, said CEO Klaus Bugge Lund.

Scandinavian countries have a rich history of technological innovation and economic stability. This is especially true if you include Finland, which, while strictly speaking isn’t part of Scandinavia, has close historical ties to Sweden (having been part of that country for centuries). It has some bitcoin success stories, including Helsinki-based LocalBitcoins, and at least one Finnish company stepped up to support the cryptocurrency by offering to pay employees in bitcoins.

“Finland is normally considered to be on the forefront of bitcoin,” says Lesse Birk Olesen, founder of BitcoinNordic. He added:

“Their FSA very early on declared bitcoin to be legal. My impression is that Sweden and Denmark may share the second and third place while Norway seems to have been lagging behind in bitcoin infrastructure.”

In Finland, the tax authority introduced a guide to taxing virtual currencies last month, which imposed capital gains tax on bitcoins, and taxes bitcoins produced by mining as earned income.

Other regulatory bodies across the region seem either benign, or willing to work with bitcoin. Few seem actively inhospitable to virtual currencies.

Norway currently falls into the ‘benign’ category. “As in most other countries, digital currencies and trading with them are currently not explicitly regulated. It seems like Norway does not want to be the frontrunner,” said Bugge Lund.

However, in Sweden, the Finansinspektionen financial regulator classified bitcoin as a means of payment late last year, requiring anyone who wants to create an exchange to register with it and meet the requirements faced by other financial institutions. Bitcoin.se suggests that the tax authorities in Sweden may also be ready to make a ruling on sales tax soon.

“Of all the Scandinavian countries, Sweden has a long standing history of dealing with truly disruptive technologies with companies like Skype, Spotify, Klarna and of course The Pirate Bay,” said Frank Schuil, CEO of Swedish exchange Safello, which went live with its website in August. “This has created a regulatory landscape that is very responsive and helpful towards companies like Safello. Innovation is embraced rather than rejected.”

Safello, a Swedish bitcoin exchange that launched in August 2013.
Safello, a Swedish bitcoin exchange that launched in August 2013.

Safello received some angel funding from Ludwig Öberg, an advisor to Safello, who is also behind IceDrill, an ASIC mining project that went to market on BitFunder this summer. IceDrill is orchestrated through Digimex, a British Virgin Islands-based firm, but managed by Öberg, who is based in Sweden. The company, one of several projects in the Scandinavian market, is waiting for ASIC mining hardware from HashFast.

“A basic definition and rule book was set early for bitcoin, and that combined with the strong banking system that is willing to work with bitcoin companies make it a great place to start a bitcoin startup or company,” says Öberg, who now serves as an advisor to Safello. Safello says it is working with two of the four biggest Swedish banks in its vow to do “everything by the book”.

Scandinavia’s regulatory approach to the cryptocurrency is evolving, but some countries are ahead of others. All of them could still benefit from a connection with the Bitcoin Foundation. "We are in talks with folks from Sweden, Denmark and Finland, but nothing has formally materialized as of yet," said a foundation spokesperson. Nevertheless, its strong history with technology disruption (including mobile hardware), and its relatively level-headed banking system, put it in a good position to take advantage of bitcoin as things develop.

Do you know of any Scandinavian bitcoin companies that we missed? Let us know.

DenmarkFinlandKnCMinerNorwaySweden

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