The Netherlands will take a tough stance on enforcing new European Union (EU) cryptocurrency regulations, even if some providers move elsewhere, according to Laura van Geest, chairman of the Netherlands Authority for the Financial Markets (AFM).
Cryptocurrencies are not good news because they are difficult to pin down and are prone to fraud and manipulation. Their value is largely based on hype and usually have no intrinsic value. In the Netherlands, the connection between the cryptocurrency world and the traditional financial sector is still limited.
According to a survey by AFM, even though the number of cryptocurrency owners is estimated at less than 2 million, most have invested less than 1,000 euros in speculative funds and very few have borrowed money. They also said they knew it was risky and they could afford to lose. However, some cryptocurrency owners take more risks than they can afford.
Van Geest also said that the EU’s Market in Cryptoassets (MiCA) regulation can only partially address its risks. While the AFM will encourage innovation, it will take a robust regulatory approach to ensure the cryptocurrency industry adheres to high standards of behaviour.
The AFM therefore urges companies to be transparent about their activities and to work with regulators to implement new EU rules.
The Netherlands has long been a leader in financial regulation and innovation, and the AFM’s stance is consistent with the country’s efforts to stay at the forefront of regulatory developments in the cryptocurrency space.
The AFM is also working with other EU regulators to ensure a coordinated approach to cryptocurrency regulation and to ensure that the EU regulatory framework for the cryptocurrency industry is both effective and proportionate.
