The Dutch Minister of Finance told the country’s parliament that he believes cryptocurrency regulations must be implemented at both the national and international levels to address the threats that this nascent asset class presents to both investors and the government.
In a statement addressed to the States General, Wopke Hoekstra — chief regulator in the country’s finance ministry — expressed concern about the significant percentage of Dutch citizens who had invested in bitcoin and other cryptocurrencies.
“Investing in cryptocurrencies is not without risk,’ Hoekstra said, according to a translation published in regional media outlet DutchNews. ‘In contrast to savings, money put into cryptocurrencies does not fall under a deposit guarantee system and there is generally no central issuer to claim from in the event of abuse.”
Recent research indicated that more than 580,000 Dutch households own cryptocurrency, a figure that has tripled since August 2017.
Hoekstra proposed that cryptocurrency exchanges and other trading platforms should be compelled to register with the government and enact KYC/AML policies, which many countries have already put in place to help combat money laundering.
He also said that financial regulators are considering a ban on advertising “risky financial products” such as initial coin offerings (ICOs) to retail investors, particularly given the large number of scams that pervade this burgeoning market.
Finally, he said that regulators plan to encourage credit card issuers to warn customers about the risks of buying cryptocurrencies on credit. However, he stopped short of saying that they should ban their customers from this practice, as most large US banks have already done.
However, Hoekstra also warned that because cryptocurrencies can seamlessly move across borders, international cryptocurrency regulations will be necessary to truly combat the risks that they present to consumers and governments.
He is hardly alone in that sentiment. Recently, the vice-chair of the European Parliament’s Monetary Affairs committee said that the European Union (EU) should implement a “quick…regulatory response” to growing consumer interest in cryptocurrency.
A number of financial regulators have also called for cryptocurrency to be added to the list of topics that will be discussed at an upcoming G20 summit.
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