dutch central bank

Dutch Central Bank Aims to Play Leading Role in Developing CBDC in Europe as Part of Plan to Become Increasingly Digital

The Dutch central bank, De Nederlandsche Bank made an announcement in its bulletin, saying that it aims to become the European leader in the development of central bank digital currencies (CBDCs). The report highlighted that the topic of CBDC has gained more public exposure in the Netherlands than in “several other euro area countries for several reasons.”

The Dutch central bank has a positive outlook on CBDCs, as it believes that central bank money is essential to preserve as it is important for people to maintain essential trust in the monetary system.

The European Central Bank (ECB) previously expressed its interest in launching a digital Euro and stated that they have been doing theoretical research and practical experimentation. The report stated that the Netherlands could be a suitable testing ground for its testing. Even after evaluating the potential risks of CBDCs, the Dutch central bank said, “We are ready to play a leading role.”

The central bank emphasized that the use of cash is declining in the country, signaling that its citizens are using less central bank-issued currency for purchases. A CBDC could potentially allow more diversity in the payments market, as well as making cross-border payments to be more efficient, according to the central bank.

Similar to other countries in its catalyst for development for the digital payments, the report stated, “Many stores now ask clients specifically not to pay in cash, which effectively means that only private money is accepted. Due to the coronavirus pandemic, using cash has become more risky due to its risks of transmission.

However, the Dutch central bank was not included in the working group formed by six central banks to share experience on use cases on CBDCs. The six central banks were: the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, Sveriges Riksbank, Swiss National Bank, and the Bank for International Settlements.

Sweden’s central bank has also started testing an e-krona, its CBDC to be run on blockchain, to simulate everyday banking activities, including payments, deposits, and withdrawals from a digital wallet on a mobile phone.

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Dutch Central Bank Forces Crypto Firms to Register Within Two Weeks or Face Cease and Desist

The Dutch Central Bank, De Nederlandsche Bank (DNB) has announced that crypto companies must register with the authority by May 18, or to stop operating immediately.

DNB has enforced the Dutch anti-money laundering (AML) laws, which was passed by the Dutch Parliament in April to comply with the Fourth Anti-Money Laundering Directive (AMLD4) laws. The Dutch AML laws are in compliance with the Financial Action Task Force-recommended AML directives and standards.

The AMLD4 laws were amended on April 21 by the Dutch Upper House, which states that firms that offer services to convert crypto and fiat, and crypto custody services must cease and desist if they do not register with the central bank by the deadline. The report did not make it clear regarding why the Dutch Central Bank decided to cite the European’s AMLD4, rather than the most recent directive, the AMLD5.

A draft application could be sufficient to fulfill the registration requirements by May 18, according to DNB’s announcement. The tight two-week notice may have been implemented due to the fact that the Dutch Parliament did not strengthen its AML laws until April 21, although the EU released its fifth EU AMLD in September last year, and all EU members had until early January to implement the directive.

Dutch central bank aims to play a leading role in developing CBDC in Europe

DNB made an announcement in its bulletin, saying that it aims to become the world leader in the development of central bank digital currencies (CBDCs). The report highlighted that the topic of CBDC has gained more public exposure in the Netherlands than in “several other euro area countries for several reasons.”

ECB encourages a robust regulatory structure for stablecoins

The European Central Bank (ECB) published an in-depth report on global stablecoins, focusing on highlighting the requirement for clear regulatory parameters for stablecoins, and the risks it may pose to financial stability. The ECB suggests that a “robust regulatory framework” must be established to address risks before its benefits could be explored.

The ECB recognizes that stablecoins could potentially improve the efficiency of the financial sector and access to financial services across the globe. Comparing stablecoins to cryptocurrencies such as Bitcoin, stablecoins could provide an alternative to volatile cryptocurrencies. The report stated, “A typical stablecoin arrangement (made up of the coin itself and the associated transfer platform and ancillary functions) seeks to reduce price volatility by anchoring the coin to a “safe” low-volatility reference asset or basket of assets.

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Kraken Acquires Registration for VASP in the Netherlands

Kraken has marked a significant milestone in its European growth strategy by securing a Virtual Asset Service Provider (VASP) registration from the Dutch Central Bank (DNB). This achievement not only signifies Kraken’s commitment to regulatory compliance but also underscores its strategic intent to expand its services within the European market, particularly in the Netherlands.

Strategic Importance of the Dutch Market

The Netherlands is recognized for its vibrant startup and technology sectors, coupled with one of the highest rates of cryptocurrency adoption in Europe—approximately 20% of Dutch citizens own crypto. This makes the country a strategically vital market for Kraken’s European expansion plans. The exchange’s recent acquisition of the Netherlands-based crypto exchange Coin Meester B.V. (BCM), pending regulatory approval, further demonstrates Kraken’s intent to deepen its market presence in the country.

Expansion and Regulatory Compliance

Kraken’s VASP registration in the Netherlands enables it to offer a comprehensive suite of services related to virtual assets, including exchange, transfer, custody, and wallet services. This expansion is part of Kraken’s broader strategy to establish a solid footprint across Europe, having already secured VASP licenses in Spain, Italy, and Ireland, and operates in Belgium through a licensed subsidiary.

The VASP registration aligns with the impending EU’s Markets in Crypto-Assets (MiCA) regulatory framework, showcasing Kraken’s proactive approach to compliance and its commitment to providing secure and regulated crypto services. This regulatory milestone contrasts with Kraken’s legal challenges in the United States, where it faced allegations from the SEC for commingling customer funds and operating without proper registration.

Future Outlook

Kraken’s securing of the VASP registration from DNB is not just a testament to its regulatory compliance but also a significant step towards its goal of becoming a leading player in the European crypto market. With this registration, Kraken aims to introduce its offerings to both retail and professional traders in the Netherlands and across Europe, further accelerating its European growth strategy and reinforcing its position amidst the evolving regulatory landscape.