Bitcoin Classified 'Commodity' by Finland Central Bank
Bitcoin has been classified as a commodity in Finland after the Scandinavian country's central bank declared that it did not meet the definition of a currency. The Bank of Finland concluded that bitcoin simply doesn't meet the legal conditions required to be considered a form of electronic payment, either. Paeivi Heikkinen, head of oversight at the bank, told Bloomberg that bitcoin was more comparable to a commodity at this point. "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....
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Finland's central bank has deemed bitcoin to be a commodity, following a determination that it does not meet the definition of a currency, or even an electronic payment method. "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," said Paeivi Heikkinen, who heads the oversight division at the Bank of Finland. "At this stage it's more comparable to a commodity." The news comes as an increasing number of central banks....
Finnish regulators have classified bitcoin as a financial service, thus granting it VAT-exempt status. The Finnish Central Board of Taxes (CBT) judged bitcoin to be a financial service in ruling 034/2014, which states that bitcoin purchases qualify as "banking services" under the EU Value Added Tax (VAT) Directive. The ruling was issued after a court classified bitcoin as a payment instrument and sets Finland's approach to the cryptocurrency apart from most European jurisdictions, which generally treat bitcoin as a commodity. However, the nation is not completely alone in taking this....
The Bank of Finland has decided that Bitcoin has failed the currency test. "The Currency Test" as it is referred to by banks and governments around the world in regards to Bitcoin has differing meanings wherever it is cited. Bitcoin's rise to the top is tumultuous indeed. In an interview with Bloomberg's Kati Pohjanpalo, Paeivi Heikkinen, the head of oversight over at the Bank of Finland, stated: "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....
Since Bitcoin's legal status in not fully clear (even to U. S. regulators), it is very difficult for Bitcoin businesses to stay compliant with local laws. It is unclear whether governments consider Bitcoin to be a "currency" or a "commodity". Depending on how Bitcoin is classified, a business may or may need to seek a money transmitter license. Recent law enforcement action by a Florida prosecutor charging two sellers at LocalBitcoins.com with operating an "unlicensed money service business" might give us an idea as to the U. S. governments stance on this issue... But, things may be....
The Swedish Tax Agency is reportedly set to reject bitcoin as a currency, treating it tax-wise as an asset, like a rare artwork, or other valuable like an antique. "Currencies are traditionally tied to a central bank or a geographic area," said Olof Wallin, an official at the country's tax agency. Such a classification would allow the Swedish tax man to charge capital gains taxes on transactions made using the digital currency, which could certainly come as not-so-good news to enthusiasts. Tax authorities are also looking into how bitcoin miners will be classified. A possibility is that....