“Finns can enter into agreements on which means of exchange they want to use,” Heikkinen said. “No one supervises or regulates it, no one guarantees it and its value has fluctuated hugely. It’s at your own risk.”
The price of Bitcoins soared in November, topping $1,000 for the first time, as speculators anticipated broader use of digital money. The price has since dropped to around $820 on Bitstamp, one of the more active online exchanges where Bitcoins are traded for dollars and other currencies. One Bitcoin cost about $15 a year ago.
The European Banking Authority warned in December that consumers using virtual currencies should be aware they’re not protected from losses. Finland’s Financial Supervisory Authority said for now it can’t regulate Bitcoins or similar software.
“If there appears a need to supervise the virtual currency and related activity, legislation should define this,” Katri Jokinen, legal adviser at the watchdog’s institutional supervision department, said on Jan. 16. “Buying Bitcoins isn’t a payments service regulated by current law. It’s like buying some product.”
Bitcoin was introduced in 2008 by a programmer, or group of programmers, going under the name of Satoshi Nakamoto. There are 21 million possible Bitcoins that can be mined by a peer-to-peer network harnessing computers to complete complicated mathematical calculations. About 12.2 million units are currently in circulation, according to Bitcoincharts.com.
“The changes in value are totally unregulated and very vulnerable to news, speculation and hoaxes,” Heikkinen said. “If the phenomenon grows and begins to cause side effects, officials will then have to consider whether to regulate it and how.”