Dutch Central Bank: Cryptocurrencies Aren't 'Real Money'

  • The Dutch central bank has recently revealed it doesn't see cryptocurrencies as "real money."
  • This, as it claims they can't be used for savings because of their volatility, nor are they fit for everyday use.

Dutch central bank De Nederlandsche Bank has recently revealed it doesn’t see cryptocurrencies like bitcoin as “real money,” as it claims these can’t be used for everyday purposes and are too volatile.

As reported by local publication Dutch News, citing a report on FinTech, the central bank is notably not planning on imposing a ban on cryptocurrencies like bitcoin, but doesn’t consider them “real money.” The bank’s divisional director Petra Hielkema stated:

If something wants to be treated as money, you have to be able to spend, save and calculate with it… So we do not consider it [cryptocurrencies] to be money as such.

Petra Hielkema

Per Hielkema, cryptocurrencies can’t be used as money because they’re too volatile for savings, and its value is expressed in “real money.” While the financial institution isn’t planning a cryptocurrency crackdown, Dutch finance minister Wopke Hoekstra has earlier this year called for a European and international movement to “combat the risks” associated with cryptocurrencies.

Per Dutch News, Hoekstra proposed a ban that would stop companies from targeting ordinary consumers with ads promoting cryptocurrencies or other risky financial products. A similar move was adopted by various tech giants, including Facebook, Google, Twitter, and Microsoft’s search engine Bing.

Moreover, Hoekstra proposed approaching credit card companies to get them to warn consumers buying cryptocurrencies on credit is a risky move. Late last year, when most cryptocurrencies were surging to their all-time highs, the “buy bitcoin with credit card” term became popular on Google, as consumers were rushing into the market.

The finance minister also revealed extra attention is going to be paid in a bid to improve transparency in cryptocurrency trading platforms through a “newly introduced anti-money laundering legislation.” Per the news outlet, over half a million Dutch households own cryptocurrencies.

Bullish on Blockchain

While the Dutch central bank isn’t too fond of cryptocurrencies, its divisional director revealed it considers their underlying blockchain technology “extremely interesting.” Per her words, the financial institution has been experimenting with it for three years, and developed four prototypes.

The central bank’s experiments, Hielkema noted, revealed that distributed ledger-based systems can’t be incorporated in the country’s payment system, presumably because of their scalability issues. She noted, however, there are “possibilities for [it] in the future, with more innovation.”

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Two Brazilian Crypto Exchanges Close Following Change in Tax Laws

  • Two Brazilian exchanges have been forced to close in the face of strict new regulations.
  • Exchanges are required to keep track of all transactions made with cryptocurrency or pay fines. 

Two Brazilian cryptocurrency exchanges have been forced to shut down following the enactment of new tax laws. 

Following reports of rampant cryptocurrency-related fraud in 2019, Brazilian politicians have created and enforced new tax regulations for the industry of cryptocurrency. 

According to a report by Bitcoin.com, exchanges Acesso and Latoex are two of the first casualties of the increased regulation. Both exchanges have decided to end operation, rather than pay the hefty fines and comply with strict regulation in the face of shrinking trading volume. 

Pedro Nunes, co-founder of Acesso Bitcoin, told Portal do Bitcoin, 

After the Federal Revenue Service introduced these rules we noticed a significant decrease in the traded volume. We also feel that the market has cooled off for smaller exchanges.

The new regulations, implemented in August 2019, require traders and brokerages to report all transactions involving cryptocurrencies. Failure to comply results in penalties ranging from 500 BRD to 1500 BRD ($120 - $360). 

Exchanges say that compliance with the new regulation requires expensive investment into new resources, which has been untenable for smaller and less profitable organizations.

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