Two Dutch Financial Authorities are Pushing For a National Licensing System for Cryptoasset Exchanges

The Netherlands Authority for the Financial Markets (AFM) and De Nederlandsche Bank (DNB), the country’s central bank, are industriously thrusting ahead for a national licensing scheme for digital currencies.

AFM and DNB recently released a report proposing that fiat-to-cryptocurrency exchanges and all custody service providers should be fully licensed as digital currencies carry “major financial crime risks.” 

The AFM and DNB, wants a licensing system established for all cryptocurrency exchange platforms and providers of crypto wallets, in order to effectively prevent terrorism funding and money laundering. 

Crypto Services Ecosystem   

   

In addition to this astonishing desire, they think amendments to the European rules for corporate finance are required to give space for small-scale business financing via blockchain.   

The AFM and DNB believe the international nature of digital currencies needs more effective international coordination to safeguard Dutch clients against the sterling risks.   

The duo revealed this in a joint recommendation, that the Minister of Finance sent to the Parliament for further diagnosis.   

The pair are fencing for a national licensing system within the Anti-Money Laundering [AML] & Terrorist Financing Act. According to the European setting, they state that the fourth AML directive has already been modified to address the risk.   

The AFM and DNB believe that a permit system enables it to “test parties at the gate and where need be, omit them from the market beforehand.”   

Considering the long-term and the uses of blockchain, AFM and DNB see it may provide opportunities for funding modest commercial enterprise activities if the digital currencies provided typify illuminated and enforceable rights like a share or bond.   

Sharp Decline in Crypto Popularity   

This includes relative rules for trading and rectifications to the rules concerning custody and settlement to avoid impeding the benefits of distributed ledger technology without any necessity.   

The duo wants to accommodate the construct of securities at national level in line with the extensive definition in existing European regulations. This provides the AFM space to start supervising tightly some significant cryptoassets.   

The AFM and DNB say:   

“Due to the deep drop in popularity of cryptoassets, the necessity has been taken to impose national rules in anticipation of this.”   

The duo has for long been warning the public against cryptoassets and ICOs because of the “great risk of deception, manipulation, fraud and cybercrime.” And those risks are still living according to the outlook by AFM and DNB.   

Recently, the global cryptocurrency community came out to demand for cryptoasset regulation in this year, as Coinidol reported.