The Netherlands’ financial regulator has vowed to keep a tight grip on the country’s digital assets sector despite looser European rules. The head of the agency overseeing the industry doesn’t think cryptocurrency is good news and has highlighted its flaws in a recent article.
Head of Dutch Financial Authority Says Cryptos Are Difficult To Fathom, Prone to Fraud
Most European countries are not opting for a total ban on crypto, but are “tightening the reins” on the industry. This is according to the Chair of the Dutch Authority for the Financial Markets (AFM), Laura van Geest, who made her opinion known in a column on cryptocurrencies in business daily Het Financieele Dagblad.
Despite the tightening of the final phase of the negotiations over the European Union’s Markets in Crypto Assets (MiCA) legislation, the upcoming regulations will remain less strict than for existing financial products. Van Geest noted:
We do not think cryptos are good news. They are hard to comprehend, susceptible to fraud and manipulation.
Van Geest pointed out that crypto assets are largely speculative and that prices can fluctuate greatly. “We have not hidden our opinion. Parties in the financial sector have been made aware of their responsibilities, and consumers have been warned of the risks,” she continued.
According to AFM’s estimates, the number of crypto owners in the Netherlands is just under 2 million and most of them invest less than €1,000. Van Geest acknowledged that the relationship between the crypto-world and the traditional financial sector is still weak.
Last year, EU institutions and member countries reached an agreement regarding MiCA. It introduces regulations for crypto service providers in the bloc. They will need regulatory approval before they can operate in the common marketplace.
“Will we then lower our supervision to the lowest level in order to be able to compete with other countries? Or do we say: people who apply for a Dutch license come to the AFM precisely because of our solid image? We choose the latter,” the head of the Dutch Financial Authority insisted.
Van Geest stressed that this path is being followed even if it means some companies will look elsewhere to try and enter the European market. “The warnings from regulators have come true in the crypto winter,” she also said in her article, published as Belgium’s former Finance Minister Johan Van Overtveldt called on governments not to allow cryptocurrency. He cited the current banking crisis that has seen the collapse of two crypto-friendly bank branches.
Expect other governments to implement crypto rules more stringent than those in MiCA. Share your thoughts in the comments section below.
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