Kuusankoski businessman Toni Rauhamäki is the man behind the expansion of the Bitcoin to the southeastern city of Kouvola. He said he wanted to install a physical machine that would allow residents to trade their cash for virtual Bitcoin.
Once it’s installed at the end of October, the Kouvola machine will become the ninth Bitcoin ATM in Finland. In addition to the Helsinki area, consumers can find the ATMs in Turku, Tampere, Jyväskylä, and Kuopio. Before Rauhamäki’s initiative, the country’s southeast had been a blind spot in the ATM network.
Finland beat neighbouring Sweden to become the first European country to install a Bitcoin ATM back in 2013. The currency itself is virtual and is not backed by any bank or company, but an open community working on its development.
Bitcoin users can scan their account information into the ATM from a QR code on their smartphones or tablet devices. Users who don’t already have an electronic wallet can get a record of their purchase on a paper printout.
"We’re talking about a decentralised database through which Bitcoin transfers take place," Rauhamäki explained.
Other Bitcoin ATMs in Finland allow users to purchase roughly 4,000 euros of the currency, however the Kouvola ATM will have a smaller limit, some 1,500 euros.
No firm figures on Finnish Bitcoin users
Because it's a virtual currency, Bitcoin does not respect geographical boundaries. While there may be hundreds of thousands of users worldwide, Bitcoin owners in Finland are thought to be few.
"My own guess is that there may be hundreds or thousands of users in Finland," said Bank of Finland digitalisation adviser Aleksi Grym.
Other estimates put the number of users in Finland at between 20,000 and 40,000. However Bitcoin ownership is based on secure cryptographic keys, which essentially offer owners anonymity and makes it difficult to measure user numbers.
"There isn’t really any way to determine where a currency owner may be located geographically," Grym pointed out.
He said that one risk factor involved in using the virtual currency is its volatility, which causes its value to fluctuate considerably. He noted that problems could also arise for users if an online merchant decides that it will no longer accept Bitcoin as a form of payment.
Entrepreneur Rauhamäki admitted that currently there are no merchants operating traditional brick and mortar stores in Kouvola who accept Bitcoin for payment. However he said that he hopes that local businesses will soon wake up to the possibility.
"Hopefully the ATM will help change things," he said.
Central banker Grym pointed out that even in Finland’s major urban centres Bitcoin isn’t a widely-accepted form of legal tender.