Wopke Hoekstra, the Dutch finance minister, in a letter issued to Holland’s parliament describes the current regulatory framework for cryptocurrencies as “insufficiently equipped.” The minister advocates for the development regional and international regulatory efforts.
Mr Hoekstra’s letter discusses the current regulatory framework in place governing cryptocurrencies, in addition to “bitcoin futures and other high-risk derivatives such as binary options.”
Mr Hoekstra states that “the number of [Dutch] citizens that invest[ed] in cryptocurrency rose sharply in a short time,” adding that “recent research by Kantar TNS [indicates] that now about half a million Dutch households” own virtual currencies.
Mr. Hoekstra describes cryptocurrencies as “inherently cross-border” in nature, owing to their “digital character.” The minister emphasizes the risks associated with cryptocurrency investment, pointing to the warnings “repeatedly” issued by “national and European” regulators. “Unlike with savings,” he states, cryptocurrency holding are “not covered by a guarantee scheme and there is usually no central [arbiter for] case[s] of misconduct.” The minister also highlights “concerns about the use of cryptocurrency for criminal purposes, such as fraud and laundering.”
Many of the regulatory failures of other nations, Mr Hoekstra asserts, stem from an inability to develop an adaptive policy approach that is “tailored” to the particularities of cryptocurrency. The finance minister states that developing “an effective […] and proportional” regulatory approach to “trade in bitcoin and other cryptocurrency is complex,” adding that “Many countries are struggling with this because the current supervisory framework and instruments are insufficiently tailored to cryptocurrency.”
Among the key regulatory issues identified by Mr. Hoekstra are the needs “close […] gaps in consumer and investor protection,” the need to “guarantee” the “integrity of the financial system,” and the need to develop a single regulatory “approach at [the] international level” due to the ease with which “national rules can […] be circumvented.”
The finance minister dismissed the possibility of pursuing a prohibition on cryptocurrency, stating that “a ban can not be expected to [be] sufficient[ly] maintained.”