The director of the Bureau of Economic Analysis of the Netherlands, Peter Hasekamp, has published a report on the need to ban bitcoin. He gives a wide list of reasons why the country’s authorities should immediately recognize cryptocurrency as illegal, as well as its production, exchange and storage. Bitcoin, he said, “has no intrinsic value and is only valued because other people can accept it.”
Hasekamp makes a popular argument among critics that bitcoin does not fulfill three main functions of money: unit of account, means of payment, and store of value. He also mentions security issues, fraud risks and notes that cryptocurrency is used in illegal activities.
The Netherlands, he said, is lagging behind countries that have taken steps to “contain the crypto rush” in recent years.
“Dutch regulators have tried to tighten supervision of trading platforms, but without much success. The Bureau of Central Planning pointed out the risks of cryptocurrency trading in 2018, but concluded that strict regulation was not necessary yet, ”writes Hasekamp.
He also mentions Gresham’s Law, according to which overvalued “bad money” tends to take place in the circulation of “good” money.
“Cryptocurrencies have shown all the signs of ‘bad money’: unclear origins, unclear valuation, questionable trading practices. Is Gresham’s Law playing again? No, quite the opposite. Cryptocurrencies are not used in regular payment transactions. Bad money goes out of circulation because no one else wants to accept it, ”he adds.
The collapse of cryptocurrencies is inevitable, so the authorities need to prevent citizens from accessing this market as soon as possible, says Hasekamp.
“This is true for both the authorities and investors. The last man will be made a fool. The Netherlands needs to ban bitcoin right now, ”writes the director of the department, without specifying how exactly the ban should be implemented.
Hasekamp’s proposal was preceded by the defeat of the Netherlands Bank in court in May. Then the oldest exchange in the country, Bitonic, was able to achieve the removal of the requirements for verification of external addresses of clients, and the central bank was forced to recognize them as illegal. While other anti-money laundering provisions remained in effect, Bitonic immediately canceled the most time-consuming wallet verification procedures, including the need to send screenshots or sign the recipient’s address.
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