Question on UTF-8 and the standardization of Norwegian letters.

The W3C is said to support the UTF-encoding of html addresses, which is
understandable.

However, we've repeatedly run into issues with the encoding of our
Norwegian websites that utilize a different set of characters.

For example, one site's name is forbrukslån.no
<https://www.xn--forbruksln-95a.no/>, using Norwegian character sets. It is
then automatically translated into https://www.xn--forbruksln-95a.no/.

I do not have the technical skills to discern whether there is a potential
solution to this, but it's somewhat frustrating to be locked out of the
UTF-8 system. The optics are not very good when trying to entice visitors.
One solution is to utilize the <a href=""> encoding, but that is not always
supported.

Does anyone know at which point there will be a solution to this, or
whether it's even feasible within today's technological framework?

Thank you

Signe K.