The Dutch Finance Minister, Wopke Hoekstra, very recently wrote a very detailed letter to the parliament, government of Netherlands, on the topic of cryptocurrency regulations. The Dutch Finance minister wrote on the aspects of the asset’s growth in the world, the risks it poses, and the concerns that arise from said risks.
Wopke Hoekstra paid close attention the rise of the investment in the digital currencies and assets by these citizens of the dutch lands. The increase in speculation might not be so secure and healthy for the citizens of the dutch lands.
The minister stated “Investing in cryptocurrencies is not without risk. 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.”
As such, he believes that there might be a need for discussions with financial institutions in the region to make certain that they are notifying their userbase of the potential pitfalls of placing their money into these speculative and risky investments, even more so, to those that borrow to invest. Furthermore, he is also a proponent of bringing about more transparency to the crypto industry and regulations might need to be imposed on new phenomena like Initial Coin Offerings
In the letter, similar to almost all of his counterparts from all over the world, Hoekstra mentioned that there is a dire need for the government to analyze and comprehend this digital asset and its functionalities in order to take effective steps to impose regulatory measures that could deal with this phenomenon in an effective manner.
Global cryptocurrency regulations
He further stated that since cryptocurrencies cannot be contained within a single territory, the need to regulate would require international cooperation from other countries, and cryptocurrency regulations only in Netherland would not suffice. He explained that the measures could start within Europe itself, but orchestrating the operations would definitely take some time. He is in agreement with several of his counterparts and colleagues across Europe and other parts of the world as many have noted that Bitcoin and it’s decentralized nature calls for regulatory collaboration across a global scale. Countries such as South Korea, France and others have also called for such an approach and it seems that this might be a significant topic of discussion at the upcoming G20 Summit. Global cryptocurrency regulations will certainly be a factor as this year progresses.
Banning cryptocurrencies doesn’t make sense and further global cryptocurrency regulations
The Dutch Finance Minister also mentioned that banning cryptocurrencies altogether would not be a beneficial approach, because of the nature of the deployment, design and utilization of cryptocurrencies. By design banning cryptocurrencies does not seem to be a viable option. He instead favored controlled and unified regulations across multiple nations (such as those within the European Union), which would ensure that users of cryptocurrencies do not get to evade taxes and that anti-money laundering practices are always followed.
He further stated that while cryptocurrencies remain a matter of question and immense discussion, their underlying technologies, such as those of blockchain, do present great promise and potential.
Since this was only a letter of indication, policies surrounding these observations might start getting developed by Netherlands soon.