When news broke out that bitcoin had surpassed the $10,000 mark, there was a surge of mainstream investors who flocked to the cryptocurrencies. Behind the excitements, various relevant regulators were fretting on criminals who were increasingly using cryptocurrencies to evade detection from the various law enforcement agencies. The Netherlands' finance ministry has said that hard to track activities are not the only threats that reinforce the need for cryptocurrency regulation. There is also the possibility of financing terrorism, given that formal banking sectors are now adept on spotting suspicious mobilisation of monies at the banking system.
Legality of Cryptocurrency in Netherlands.
Legal status of cryptocurrency varies sharply from country-to-country and is still changing in many. While some nations have allowed its use & trade, others have restricted or banned it. In Netherlands, as its popularity and demand has increased so has the concern that such unregulated person-to-person global economy may become a real threat to society. In Netherlands, the cryptocurrency market has remained unregulated but the finance ministry has set up a task force that has been tasked to ensure that by 2019 laws are in place to regulate the trade. The minister of finance has said that banning of cryptocurrencies like Bitcoin is virtually unfeasible, but the government needs to regulate the trade to take care of the improper use of the digital coins, the Minister, Mr. Hoekstra wrote a letter to the parliament requesting it to come up with an "appropriate regulatory framework" that does not jeopardize the technology's potential.
Proposals to the Regulatory Framework of Cryptocurrency in Netherlands by The Finance Ministry.
The Netherlands' finance ministry has said that the initial focus would be on consumer protections, the ministry intends to engage with credit card organizations about the need to institute stronger protections for persons who purchase cryptocurrency using credit cards. Under the various proposals put forward by the ministry, local exchange platforms & cryptocurrency services would be required to register with relevant authorities in addition to adhering to the know your customer requirements by the close of 2019. The ministry has also proposed new regulations to help protect the initial coin offering (ICO) participants.
The proposals are vital, given that regulating bodies in Netherlands have flagged issues pertaining the tech.
The Netherlands' Authority for Financial Markets, has also issued a statements calling the cryptocurrency market a " very dangerous cocktail." As a nod to the statements, the finance ministry proposed bans prohibiting advertisement of risky financial packages and products to ordinary citizens.
Further, the ministry noted that it would work with the European Union to promote research and cooperation in order to explore the "cross border nature of the trade." Also under its radar, the ministry wants to come up with systems for storage vouchers that will be covered by anti money laundering directives.
The Take Away.
In Netherlands Cryptocurrency trade has mainly been unregulated but plans have been set up to ensure its regulation. The Netherlands ministry of finance has maintained that within the country, more work needs to be done in updating the country's laws and regulations to account for cryptocurrencies.