The Minister of Finance if the Netherlands Pete Hoekstra has received a notice about the need to introduce an official licensing system for cryptocurrencies operations. This has been reported by Dutch media source Nederlandse Omroep Stitching on the 18th of January.
Previously, the Minister requested an advice from the Netherland`s Authority for Financial Markets and the Central Bank of the Netherland about cryptocurrencies and activities with them. This happened at the end of previous year, and now, actions are coming.
It is possible to see, that the Minister started working with the advice as soon as I was received, because the growing popularity of cryptocurrency has made the issues with investors` protection very urgent, even pressing. As well, money laundering and terrorist financing via crypto became issues that need an urgent solution. So, the decision should have been taken asap.
The Netherland`s Financial Intelligence Unit reported, that the number of unusual transactions in cryptocurrency increased from 300 to 5,000 per year. And the offered system of licensing would definitely relieve the problem. this would require the cryptocurrency exchanges and wallet owners monitor the transactions and report all suspicious activities to the authorities. And the exchanges will have to collect and to store information about their customers, and, when the legislation requires it, to share it with the authorities.
The license will not be issued to anybody. The companies willing to get the license will be tested and checked, for example, if they are able to collect all required user data.
This measure is supposed to be as a dramatic for young innovative companies, as this is considered to be a huge step backwards in the local innovation, according to Richard Kohl, a member of the Netherlands Bitcoin Foundation.
Bitcoin supporters believe, that the new regulation is going to bring lots of paperwork and expenses to companies if they want to be compliant. And this will create a huge competitive disadvantage to those established competitors, like banks, for example.