01 October 2014

Dutch central bank warns banks off Bitcoin

04 June 2014  |  4908 views  |  1 amsterdam

The Dutch central bank has issued a warning to the nation's banks about the perils of dabbling in bitcoin-related businesses.

DNB is breaking with the usual central bank convention of alerting consumers to the risks associated with virtual currencies by addressing its latest missive directly at the regulated banking and payments industry.

The Bank is concerned about the integrity risks posed to the nation's financial institutions by getting involved with bitcoin and the issues surrounding anonymity and anti-money laundering rules.

In a statement, DNB says: "In 2014, DNB will investigate whether banks and payment institutions are actively involved with new payment products such as virtual currencies and (it) will assess the degree to which these institutions control/manage their integrity risks. The control should include effective measures with respect to client acceptance and the monitoring of new innovative suppliers."

The move will be a blow to the nascent bitcoin industry in the Netherlands, which has so far been viewed as a liberal safe-haven for virtual currency business ventures.

Just last week, the UK government signalled its intention to address concerns about the application of the Money Laundering Regulations by banks, and in particular their use in denying access to banking services by firms trading in virtual currencies. To this end, the Treasury convened a Private Sector Consultative Forum in March with banks, firms, regulators and FATF member governments to "enable a better understanding (of) the risks from virtual currencies and how these might be mitigated, including by banks".

Comments: (1)

Alexander Peschkoff - TEDIPAY - London | 04 June, 2014, 11:01

Don't they read news in the Netherlands?.. SV gang seem to have successfully lobbied Apple to allow "virtual currencies" into Apple's ecosystem.

That doesn't mean BTC will fly as it still needs to gain mass appeal. But that's another story altogether.

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