Norway Government: Bitcoins Aren’t a Currency, They’re Just an Asset

The government of Scandanavia’s richest nation today denounced bitcoins as not real money.

Norway says that bitcoins “don’t fall under the usual definition of money or currency,” according to Hans Christian Holte, the country’s director general of taxation. According to Bloomberg, Norway will instead treat Bitcoins as an asset, thus charging a capital gains tax.

There are about 12 million bitcoins in circulation, according to Bitcoincharts. The crypto-currency’s “value” often fluctuates by as much as 30% in a single day—this extreme volatility has been one of the bitcoin’s major criticisms. “At the end of the day, I think people want something backing a currency,” Sophocles Sophocleous, a director at Argos Capital Management told Bloomberg.

As more governments issue official stances on the bitcoin, the digital currency looks less and less like a viable alternative to standard money. While the US now describes bitcoins as a “legal means of exchange,” the story is largely different overseas. Last week China’s central bank barred financial institutions from dealing in it, while the European Banking Authority is wary of the risks of using unregulated digital money that is “susceptible to hackers,” according to Bloomberg.