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The Dutch Central Bank (DNB) announced it is considering oversight of cryptocurrency-related companies, to ensure against financial crimes, reported De Telegraaf. The DNB also came up with a critical statement, outlining several drawbacks of cryptocurrencies.
“The biggest shortcomings [of cryptocurrencies] are inadequate capacity, inefficiency due to high energy consumption and lack of complete certainty about completing a transaction,” explained the central bank.
The DNB performed its own experiments with blockchain and distributed ledger, but just like the European Central Bank before it, decided the technology could not perform up to par, and abandoned the project. The central bank even created its own digital asset, the Dukaton, generated through mining and based on the Bitcoin protocol.
Holland remains one of the most crypto-friendly countries, and is a center for technological conventions. The Gulden project, while hurt by the bear market, is still around. Recently, the asset was added to the Blockfolio signal app:
https://twitter.com/Gulden/status/1069844176269905920
But the biggest concern of the central bank was the potentially anonymous nature of digital assets, and the possibility to obscure transactions. The DNB believes providers of services related to digital assets should be able to complete KYC/AML screenings to avoid financial crimes and terrorism financing.
The DNB also pointed out the current level of technology cannot cover the high standards of financial markets infrastructures (FMI).
“Requirements for FMIs are safety, reliability, efficiency, payment finality (legal security), authorization, resilience, availability, capacity, scalability, costs and sustainability,” stated the central bank.
At the moment, digital assets are attempting to become a part of the financial legacy system, firstly as payment systems, and secondly by using tokens to represent traditional assets. While blockchain projects have aimed at disrupting banking services, the financial system is also prepared for upgrades. In 2019, the SWIFT interbank payment system will face an upgrade to become faster, and the TIPS instant payment is already available for Euro area bank users.