The Netherlands may be the next country to implement crypto regulations, after the Minister of Finance, Wopke Hoekstra, received a report that recommended a crypto licensing system that would end anonymous trading. The report was requested by Hoekstra at the start of 2018, when he was concerned about the levels of investment by Dutch nationals in cryptocurrencies and ICOs, given their speculative nature. It was conducted by the Netherlands Authority for the Financial Markets and the local central bank, De Nederlandsche Bank, who recommended that a licensing system needed to be introduced to tackle money laundering and illegal purchases/financing.
User Monitoring to be Introduced
Hoekstra himself said in December that a system with permits for trading platforms and wallet providers for crypto coins should be put in place. This seems to be along the lines of what has been suggested, with crypto exchanges and wallet providers reportedly requested to monitor customers’ transactions and report suspicious activity to the authorities. Exchanges will also have to collect and hold information about their customers in case authorities should need it as part of an investigation.
Any form of licensing will have huge knock-on effects for both companies and individuals involved in cryptocurrency, although with a license rather than a total ban on digital assets being proposed it is clear that the government is not opposed to cryptocurrencies in principle.
Strong Opposition to the Plans
The news hasn’t gone down well with cryptocurrency enthusiasts, with Richard Kohl, Bitcoin Nederland Foundation board member, stating that the move would have an adverse impact on young blockchain companies and would stifle innovation. Primary among his concerns seems to be the implementation of a system where every company that deals in cryptocurrency must hold large amounts of customer data, which presents privacy as well as security issues. There are currently around 30 such companies already in existence who, quite rightly, may be worried about these developments.
The arguments at the heart of this issue reflect the arguments around crypto as a whole – privacy versus national and international security. This is a fine line that won’t be defined by regulations, but regulations and licenses are a necessary and imminent headache that crypto must tackle if it wants to be taken seriously as a major player on the world financial stage.
