Cryptocurrencies are not real money, says Dutch central bank

Bitcoin mining. Photo:
Bitcoin mining. Photo:

Crypto currencies are not money and consumers run major risks in buying them, but the Dutch central bank is not planning to impose a ban on the likes of bitcoin, bank divisional director Petra Hielkema says in a bank publication on fintech.

‘If something wants to be treated as money, you have to be able to spend, save and calculate with it,’ she said. However, things are not often bought with cryptocurrencies, it is too volatile for savings and its value is expressed in real money, she said. ‘So we do not consider it to be money as such,’ Hielkema said.

Nevertheless, the central bank does consider the technology behind bitcoins – blockchain – to be extremely interesting. ‘We have been experimenting with the technology for the past three years and have developed four prototypes,’ she said.

The experiments have shown that the systems cannot yet be incorporated into the Dutch payment system but there are ‘possibilities for in the future, with more innovation,’ she said.

Earlier this year, Dutch finance minister Wopke Hoekstra said there should be a European and international approach to combat the risks associated with bitcoin and other cryptocurrencies.

Recent research showed that half a million Dutch households now own cryptocurrencies.

Among the measures Hoekstra is considering are a ban on targeting ordinary consumers with advertising for risky financial products.

He also wants to talk to credit card companies about warning consumers of the financial risks of buying cryptocurrencies on credit. Extra attention will also be paid to improving transparency around trading in cryptocurrencies, using newly introduced anti-money laundering legislation.

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