Norwegian Tax Official: Bitcoins Cannot be Defined as “Money”

Jon Southurst
Dec 16, 2013 at 13:00 UTC
Updated Dec 16, 2013 at 13:14 UTC

Yet another government official has released a statement on bitcoin, and once again the news is mixed.

This time, Bloomberg reported that Norway’s director general of taxation said bitcoins “don’t fall under the usual definition of money or currency”.

The comments, made in an interview with Christian Holte, have been marked by some as yet another failure to gain legitimacy in the eyes of the authorities.

International statements

The comments echo a similar statement from the People’s Bank of China, which was followed by New Zealand and Australia. Although all these statements have carried the message that governments and central banks cannot view bitcoin as a currency, some have been official edicts and others simply offhand comments in interviews.

The bitcoin price has wavered between $785 and $991 on CoinDesk’s BPI for the past week, after recovering from a drop that occurred right after China’s comments. The trend has been gradually downward since the $991 week high, standing at $828 at the time of writing.

Price uncertainty

The price in Norwegian krone fell, going from 6,086 to 5,164 NOK in the period since the statements were made.

It is possible these government comments (or at least the media’s reaction to them) are responsible for the price uncertainty.

Bitcoin’s November surge to over $1,200 followed more favourable comments by US authorities.

Whether the negative comments should come as any great surprise, or even a ‘blow’ to bitcoin is debatable. Most central banks have a fairly narrow legal definition of ‘currency’ anyway, according to the same Bloomberg report.

Real-world power

Most, including the IMF (International Monetary Fund), recognize currency as something issued only by a nation-state, thus ruling out bitcoin automatically.

Even gold, which appears on some currency conversion charts (like bitcoin), is generally referred to as a commodity and is not accepted in day-to-day life.

As for the Norwegians, there is at least one resident who recognizes bitcoin as something with real-world purchasing power.

Kristoffer Koch made headlines in October when his forgotten stash of bitcoins suddenly reached over $800,000 in value, allowing him to cash out and buy an apartment.

He might now be wishing he’d held them for a few weeks longer.

Parliament image via Shutterstock

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