Netherlands to regulate, not ban cryptocurrencies

Banning cryptocurrencies like Bitcoin is unfeasible, but the Dutch government wants to regulate the trade in cryptocurrency internationally to address the improper use of these digital coins, Minister Wopke Hoekstra of Finance wrote in a letter to parliament, NU.nl reports.

Hoekstra wants to bring cryptocurrencies into an "appropriate regulatory framework" without jeopardizing the technology's potential. He wants to make sure that the conversion of cryptocurrencies into regular money does not happen under the radar, for example.

The Minister also wants exchange platforms and providers of cryptocurrency storage vouchers to be covered by anti-money laundering directives. This means that these platforms will have to comply with many more rules, such as reporting unusual transactions. He hopes to implement these rules by the end of 2019.

When it comes to ICOs, Hoekstra wants to investigate how investors can be just as well protected as with a normal IPO. This will entail ICOs falling under the supervision of the Dutch authority on financial markets AFM.

Given the cross-border nature of these digital coins, this will need intense cooperation with other countries. "In the international context, I see increasing support and urgency", Hoekstra wrote. He wants the Netherlands to play a pioneering role in Europe in this field, and also consult with countries outside Europe, such as the countries in the G20.

In the short term, Hoekstra will take measures to help protect consumers against excessive financial risk, according to NOS. Advertising for risky financial products aimed at ordinary consumers will be banned. This specifically concerns binary options, which entails speculation on the value of cryptocurrencies. He is also looking at an EU ban on other risky products for consumers, like bitcoinfutures, which also speculates on the value of bitcoins.