Cryptocurrency organizations based outside the Netherlands may be prohibited from working in the country in accordance with the new regulation, which will be adopted early next year.
Tobias Oudejans, spokesman for the Netherlands Central Bank (DNB), said that the upcoming regulation will force local companies to register with the Central Bank. In addition, foreign cryptocurrency companies will be prohibited from providing services in the country.
Moreover, foreign companies include all companies registered outside the European Economic Area. When asked if foreign cryptocurrency companies would have to set up offices in the Netherlands or Europe in order to gain access to the market, Oujans chose not to answer.
However, he noted that legislation that includes the rules of the fifth EU Anti-Money Laundering Directive (AMLD) is still under consideration. The Central Bank has already asked all Dutch cryptocurrency companies to register with the regulator before January 10, 2020.
New legislation and the need for registration with the Central Bank are based on the requirements of combating money laundering. Like all financial firms, cryptocurrency companies must register with the Dutch government. The regulation of the new industry is fairly standard, although it may seem excessive to industry participants.
Founder of one of the local Crypto2Cash firms, PJ Datema, believes that the lack of clear regulation in the emerging cryptocurrency market is a problem that many Dutch cryptocurrency service providers face. In his opinion, unscrupulous participants will not be able to meet DNB standards, and after they leave the market will be able to reach a new level.
“This is really the right step. I’m not saying that the government approved the industry, but we are finally moving forward after a long period of silence, ”said Deytma. “It’s good that they take action. We want the market and participants to evolve, and that the appropriate AML and KYC rules appear in the industry. ”
It is not yet known how international or even other European firms will work in accordance with the new regulation. According to Deytma, these rules are good for Dutch companies and can crowd out competitors from Germany, France and other countries from the local market. At the moment, many questions remain, for example, what the final legislation will look like, how DNB will apply it, and how international players will be able to work in the Netherlands.
“Given the presence of a single parliament in Brussels, it would be obvious to develop a single set of rules for Europe,” said Deytma.
The Netherlands is not the only European country that is preparing to adopt regulation for the cryptocurrency industry in the coming months. In August, it became known that the Czech Republic would introduce tighter regulation of cryptocurrencies than the EU requires. In July, the French regulator announced the imminent publication of rules for cryptocurrency companies, and in the spring of Finland began to regulate cryptocurrency services operators.