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Bitcoin fails Finnish money test

January 20, 2014

It's not a Bitcoin ATM; it's a commodity trading kiosk. This would have to be the revised description of the first Bitcoin-selling machine in Finland, which was installed in a Helsinki train station last month.

The Finnish central bank has since ruled that the virtual currency actually is not a currency — or for that matter any kind of money at all, according to a Bloomberg report.

"Considering the definition of an official currency as set out in law, it's not that. It's also not a payment instrument, because the law stipulates that a payment instrument must have an issuer responsible for its operation," Paeivi Heikkinen, head of oversight at the Bank of Finland in Helsinki, told Bloomberg. 

This latest central bank decision underscores the patchwork nature of governments' acceptance of Bitcoin as a currency. Taiwan recently kiboshed plans to install a Bitcoin ATM in that nation — at around the same time that Canada was getting a second Robocoin Bitcoin ATM.

China declared that Bitcoin was not a legal substitute for the yuan, instructing banks not to process transactions in bitcoins, and forbidding merchants and third-party payment companies to price goods in bitcoins or accept the digital currency for payment.

Norway has also disqualified Bitcoin as a currency. Denmark has yet to rule on the question and the U.S. is still figuring out how to monitor and regulate Bitcoin. And the U.K. is trying to decide whether Bitcoin purchases should be subject to value-added tax.

Bitcoin is still considered as legal payment, just like any bartered item. However citizens who make a profit on Bitcoin speculation must pay capital gains taxes.

Read more about regulatory issues.