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An Exclusive Report on Blockchain & Cryptocurrency Laws and Regulations in Northern Europe


Blockchain, an intriguing technology, long connected primarily with the virtual currency ‘Bitcoin’ has evolved as one of the most crucial technologies accessible today. Legacy technologies are being challenged in various sectors including financial, healthcare, and energy by advanced blockchain-based solutions. In terms of geographic influence, blockchain has also surged. Entrepreneurs, engineers, venture capitalists, and bankers are pouring their time, energy, and money into bitcoins and other cryptocurrency-related businesses, but the true appeal is the underlying "blockchain" technology.

Over the last two years, an obscure technology long linked primarily with the virtual currency Bitcoin has become one of the most crucial technologies accessible today. Legacy technology is being challenged by suggested blockchain-based solutions in financial services, healthcare, energy, capital markets, and many other areas. In terms of geographical influence, blockchain has also surged. Entrepreneurs, engineers, venture capitalists, and bankers are pouring their time, energy, and money into bitcoin and other cryptocurrency-related firms, despite the fact that the underlying "blockchain" technology is the actual draw. 

While it is frequently stated that cryptocurrencies and blockchain technology are unregulated, this is hardly the truth. Let's take a deeper dive to learn why.

Impact Of Regulations On Cryptocurrency & Blockchain

Many view the rise of crypto assets, such as cryptocurrencies, as part of a wider trend toward more flexible financial market infrastructures that boost options while also providing innovative solutions to fulfill both current and future payment demands. In the future, the extent and quality of regulation in a given jurisdiction will directly influence the adoption of cryptocurrencies and stablecoins. Many jurisdictions, including the United States, regulate cryptocurrency activities uniquely. Some crypto exchanges that do not clearly fit under the present legal framework have built strong techniques to authenticate their users’ identities and the source of money. 

Crystal-clear Anti-Money Laundering (AML) and Know-Your-Customer (KYC) practices can help tremendously in eradicating illegal activities happening through exchanges and other cryptocurrency-powered platforms. A pro-innovation regulatory approach is required to enable the crypto and blockchain industry's growth while simultaneously safeguarding customers and avoiding illicit activities. 

Northern Europe Is a Digital Safe Haven for Cryptocurrency Projects

Despite the instability that erupted in the crypto market this summer, there is a significant long-term indicator that should be factored into any sophisticated analysis: the combo of adoption and regulation. Large economic jurisdictions such as the EU and the US have already taken initial measures toward crypto and blockchain regulations. The Council presidency and the European Parliament struck a preliminary agreement on the markets in crypto assets (MiCA) proposal at the end of June 2022, which includes issuers of unbacked crypto assets and stablecoins, as well as trading platforms and wallets where crypto assets are stored. MiCA's goal is to give further clarity across the European Union, as several member states currently have varied national regulations concerning crypto assets. 

In order to provide you with the most significant details on the current state of cryptocurrency and blockchain in Northern Europe, we have put up a brief summary. Let's take a peek.

1. Sweden

Regulations & Legislation: There is still no clear crypto or blockchain legislation in the country. As a result, "blockchain is often forced to conform within the current legal framework." The Swedish Data Protection Agency and the Swedish Financial Supervisory Authority are the main regulatory bodies in the country.

Major Initiatives: Lantmäteriet, Sweden's land-ownership authority, began exploring blockchain technology in 2016, resulting in a pilot project to design future real estate transactions via smart contracts. In June 2018, developers executed the platform's first successful transaction. Together with Nasdaq, one of Sweden's leading banks, SEB, launched the Nordic Fund Ledger, a partnership aimed at improving mutual fund trading through the use of blockchain. 

Statistics: 15 blockchain firms were launched, and $39.9 million (or 40 million euros) was generated through initial coin offers (ICOs).

Taxes:  Local tax advisers clarify that capital gains from selling cryptocurrencies are subject to a 30% tax.

Key Players Within Sweden: 

3Box- a decentralized consumer data storage system

AIAR- an Ethereum-based education platform

Bitrefill- a digital gift card and mobile airtime supplier 

2. Denmark

Regulations & Legislation: Denmark has no cryptocurrency-specific legislation. Danske Bank, Denmark's largest bank, declared in 2021 that it will not offer cryptocurrency services to consumers but will not interfere with transactions originating through crypto platforms.

Major Initiatives: Maersk and IBM announced the debut of TradeLens in 2018, a blockchain-powered shipping solution designed to foster more secure and efficient global trade.

Statistics: 24 blockchain firms launched & a total of $32.4 million (32.5 million euros) was raised by blockchain initiatives.

Taxes: Cryptocurrency earnings are subject to income tax, which is estimated to be approximately 37%. If you're a lavish earner, your crypto gains — as part of your entire income — might go up to 52% tax.

Key Players Within Denmark: 




3. Finland 

Regulations & Legislation: The Finnish Financial Supervisory Authority is the primary regulatory body for all crypto matters in the country. The Act on Virtual Currency Providers took effect in 2019. Any organization that offers or markets its crypto-related services to Finnish clients is required to register. Myriad types of digital currencies are not differentiated in any way by the Virtual Currency Act.

Major Initiatives: An alliance between the Finnish government and Essentia to develop blockchain-based solutions for smart logistics was first announced in 2018.

Statistics: 18 blockchain startups launched

Taxes: Cryptocurrency exchange or sale profits are subject to capital gains tax, which is calculated at a rate of 34% on excess income over $29,922 ($30,000) and 30% on income up to that amount.

Key Players Within Finland: 

SOMA (SOcial MArketplace)- a decentralized P2P platform

LocalBitcoins- a P2P platform for digital currencies

Haja Networks- developer of distributed & decentralized database solutions based on blockchain solutions

4. Norway 

Regulations & Legislation: The Norwegian Data Protection Authority, the Financial Supervisory Authority (FSA), Norges Bank, and the Norwegian Tax Authority are the advisory and regulating bodies for blockchain and cryptocurrencies. The FSA has already stated that a legal framework and guidelines for investor protection are required in case cryptocurrencies turn out to be a good investment for consumers. The Regulation on Markets for Crypto-Assets (MiCA), the EU's flagship cryptocurrency law, has not yet been adopted, thus it is doubtful that Norway would pass new cryptocurrency legislation as of now.

Major Initiatives: A regulatory sandbox was formed by The FSA in 2021 to boost fintech innovation. A central bank digital currency (CBDC) is being intensively researched by the Central Bank of Norway and is now undergoing a two-year phase of technical testing.

Statistics: Total equity funding of $26.9 million (27 million euros), 22 blockchain solution companies.

Taxes: Cryptocurrency holdings in Norway are susceptible to the standard capital gains tax, much like in other Scandinavian nations. The yearly tax rate for private individuals is 22%; due to a uniform corporate income tax rate, the same proportion also applies to legal companies. A person would pay extra, though, if his annual income exceeded specific thresholds.

Key Players Within Norway: 

Choose- a cryptocurrency platform backed by CO2 emission permits

ViPi Cash- a digital platform that uses blockchain technology to enable international money transfers

Diwala- a decentralized platform that uses decentralized ledger technology to verify people's skills

5. Latvia 

Regulations & Legislation: The country's regulations on cryptocurrency are still mostly lax. In the country, cryptocurrency is still mainly unregulated. The Financial and Capital Market Commission, the country's major financial regulator, warned investors in 2020 to "be extra attentive since cryptocurrencies operate in an infrastructure that is now defined by very few regulations than in the financial and capital markets."

Major Initiatives: The Latvian Economic Ministry launched two blockchain-based experimental projects in 2019. The first would increase the State Revenue Service's supervisory capabilities and minimize the shadow economy by using a blockchain-based cash register. The second would make obtaining limited liability company status easier by utilizing blockchain technology in the Enterprise Registry.  In 2021, the national airline carrier- airBaltic started accepting Dogecoin and Ether as payment options. It began accepting Bitcoin as early as 2014.

Statistics: 15 blockchain startups launched

Taxes: The Latvian PIT Act classifies cryptocurrency as a capital asset liable to the general capital gains tax of 20%.

Key Players Within Latvia: 

Blockvis- a blockchain development and consulting group

Velvet- a blockchain-powered solution for online identification

Soft-FX- a software developer, that has collaborated with major crypto platforms such as Binance, and Bifinex, among others

6. Lithuania 

Regulations & Legislation: Lithuania is among Europe's top pro-blockchain countries. It was one of the first countries to establish ICO rules in 2018. From 2019, all providers of digital assets had to be registered with the country's Centre for Registers.

Major Initiatives: In 2018, the Bank of Lithuania unveiled LB Chain, a digital currency sandbox intended to serve as a model for central bank-issued blockchain-based coins.

Statistics: 31 blockchain firms have been launched, and local startups have raised $1.09 billion (1.1 billion euros).

Taxes: The corporate tax rate for cryptocurrency enterprises is 15%, and the individual income tax rate is also the same.

Key Players Within Lithuania: 

DappRadar- a market intelligence vendor for DApps

Bankera- a blockchain-based digital bank

BirDegree- a blockchain-backed & gamified online education platform

7. Estonia

Regulations & Legislation: Estonia became the first country in Europe to establish clear legislation and guidelines for digital currencies. According to local legislation, digital currencies are "value defined in digital form that is digitally transferable or tradable and that people have accepted as a payment instrument." Digital currencies, on the other hand, are not regarded as legal currency and do not have the legal status of money.

Major Initiatives: The blockchain-backed e-Residency program allows anybody to form and administer an EU-based company entirely online and "has proven to be a substantial facilitator of blockchain business activity in the country." It should be mentioned, however, that when the country refined the definition of virtual asset service providers (VASPs), more than 1,000 licenses from crypto businesses were revoked. The government employs a blockchain-based keyless signature infrastructure that is extremely scalable and privacy-focused, and it is utilized in healthcare, property, business, and inheritance registries, as well as in the country's digital court system.

Statistics: 200+ blockchain solution providers, $284 million (285 million euros) funds raised

Taxes: Digital currencies are considered property, and their trade is subject to a 20% capital gains tax.

Key Players Within Estonia: 

Idealogic- a software development firm with expertise in product design & custom software development in Fintech a cryptocurrency wallets developer a healthcare blockchain technology company

Closing Thoughts 

Marianna Charalambous, research project manager at the University of Nicosia and a member of the EU Blockchain Observatory, stated that Estonia is still a pioneer in public blockchain deployment. "Most banks have prohibited their customers from dealing in cryptocurrency, and the founders of cryptocurrency startups have had their bank accounts forcefully closed." "Because most individuals in the Nordics are still reliant on the fiat banking system, this is a big impediment to creating breakthroughs," said Kristina Lillieneke, CEO of BlackBird Law and a member of the EU Blockchain Observatory. 

All of these statements from Blockchain and cryptocurrency specialists demonstrate that the EU is on its way to becoming a pro-blockchain jurisdiction. The need for crypto regulations is getting more pressing by the day. Many nations have already begun to implement regulations to make crypto trading safer for their residents. But how long will it take for Global Crypto and Blockchain Regulations to be put in place? Only time will tell.

If you are a Crypto or Blockchain enthusiast looking for guidance to get started on your next digital venture, we can provide you with the required assistance. 

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