Dutch financial authorities to issue licences for crypto wallets

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De Nederlandsche Bank (DNB), the nation’s central bank, and the Netherlands Authority for the Financial Markets (AFM) published a report earlier this week concerning a licence scheme for crypto exchanges and wallet service providers. It is hoped that the move would prevent money laundering and financing of terrorism.

In relation to what it calls “high risk financial crimes, the report says: “These risks must be addressed effectively, which can be achieved as a result of the international coordination of countermeasures that AMLD5 [the Fifth European Anti-Money Laundering Directive] provides.”

The two authorities chose a licensing system rather than registration, because it allows “pre-market entry assessment” and gives greater scope for them to establish whether or not the parties involved would be able to comply with AMLD5.

The two Netherlands authorities also “recommended that the European regulatory framework for corporate funding should be amended to enable blockchain-based development of small-and-medium-sized enterprises (SMEs) and to enable the use of crypto assets like shares or bonds,” Coindesk reports. This means they recommend reconciling the Dutch definition of a security with the broader definition provided by the EU. This in turn would make it possible to allow new forms of funding for ICOs and STOs, as set out in EU rules.

With regard to this, the report states, “Amending the definition is also desirable in anticipation of potential European consensus on the qualification of certain cryptos as security under present legislation.”

In addition to this, the regulators have requested that international crypto rules be put in place, simply because the Netherlands has less than 30 providers of crypto services, making their trading volume significantly lower than the big operators. The report reflects this in the following statement: “The evolution of cryptos is primarily internationally-oriented given their inherent cross-border nature, and cannot be confined to the Dutch market alone.”

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