Netherlands Becomes One Of The Latest Countries To Work On Introducing Regulations To Govern Cryptocurrency Within Their Borders
With so many countries working on their regulatory measures, the Netherlands Bank is working to do the same. Their efforts are supported by the Authority for the Financial Markets (AMF) as well, helping them to integrate the other crypto exchanges, according to Klaas Knot. Knot is the president for the Dutch central bank.
So far, the Netherlands Bank has been lucky that cryptocurrency poses no risk for the financial stability of the country, but vulnerability could be a concern as the market grows. The industry has long been associated with the potential for money laundering and volatility. In a statement during a Groningen financial conference, the head of the Bank called for either an international approach or a pan-European Union approach. However, in the meantime, there’s no reason for the Netherlands to stay out of the game.
Still, the fact that crypto assets reach around the world with no bounds is still a major problem. That’s makes it even harder for regulators to establish rules, considering that they can only take measures at the state levels. However, another issue is the fact that regulators have to figure out what hard of the industry is already covered by the current laws in the industry.
In the speech, Knot said,
“Given the international character of cryptos, a global or European approach is needed. But that will take time. Meanwhile, we at the Dutch central bank are assessing the possibility, together with the Authority for the Financial Markets, of a proportional supervisory framework for cryptos.”
With this new approach, the Bank needs to focus on taking care of digital currency exchanges in the same way that legal provisions have already handled trading in traditional finances. The speech continued, saying,
“After all, the main rationale for our supervision, underpinned by our legal mandate, is to safeguard the integrity and resilience of the financial system. The exchanges where cryptos are bought and sold are where the ‘new’ and the ‘old’ financial system overlap, and where we will focus our supervisory efforts.”
The cryptocurrency framework that the Financial Stability Board has put in place can be used by central banks around the world.