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Netherlands: Cryptocurrencies Do Not Pose a Major Risk to Financial Stability


The CPB Netherlands Bureau for Economic Policy Analysis has published a report on the risks related to financial markets since 2012. According to the report, requested by the Parliamentary Committee of Inquiry on Financial Assistance, cryptocurrencies are not equivalent to cash.

Most users seem to hold their cryptocurrency, at least the Bitcoin, instead of using it for daily transactions. This makes speculation the most important motive on the crypto market.

Furthermore, they explained that cryptocurrencies don’t endanger the Netherlands’ financial stability.

At present, cryptocurrencies do not pose a major risk to financial stability in the Netherlands, given the small volume of trade and the limited exposure of financial institutions. However, they do involve risks when it comes to crime financing, fraud, potential losses of private investors and high energy consumption. Financial stability risks may arise in the future if the interaction with the traditional financial system increases.

The report notes that regulation doesn’t properly exist in the financial sector. However, interest and government debts are two categories that pose the highest risk to the Dutch economy.

Wopke Hoekstra, Minister of Finance, has previously stated that the country plans to regulate cryptocurrencies, “The current supervisory framework and instruments are insufficiently tailored to cryptocurrency.” Talking about ICOs, he wrote, “It is being investigated whether investors in ICOs can become just as good protected as investors with a normal IPO or bond issue. The current framework is not sufficient for this.”

Earlier in May, Netherlands’ biggest cryptocurrency exchange B3LP removed Bitcoin Cash (BCH) from its platform. They were already planning to stop BCH activities and the upcoming hard fork gave them a reason to do so. At the time of writing, BCH is valued at $1,014.02, with a market cap of $17 billion. After crossing the $1,000 mark in April 2018, the price increased slowly before declining in the month of May.

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