Dutch regulator says crypto not yet suitable as means of payment or investment


A Dutch regulator stated that the crypto derivatives market should be restricted to wholesale trade. The reasons are not unfamiliar — lack of transparency, market manipulation and “other forms of criminal activity.”

On May 12, the head of Capital Markets and Transparency Supervision at the Dutch Authority for Financial Markets (AFM), Paul-Willem van Gerwen, shared his opinion on the crypto derivatives trade at the Amsterdam Propriety Traders Managers Meeting.

Van Gerwen highlighted, that despite (or perhaps because of) the market’s rising interest in crypto derivatives trading, the AFM “do regard such trade as entailing risks” and consider this market to be not as mature as the other derivatives markets. A specific problem arising from the volatility of the crypto products, according to van Gerwen, leads to a question of whether “the parties to the derivative transaction will be in a position to fulfill their promises.”

Hence, the AFM believes that operations with crypto derivatives should be restricted to the wholesale trade. The official acknowledged that, unlike its British counterparts from the Financial Conduct Authority (FCA), the AFM has not banned such trade, but alluded that it surely might do so:

“Don’t get caught up in the excitement of this trading, don't let yourself be tempted into retail trading.”

He also added, “Cryptos and derived tools aren’t yet suitable as a means of payment and/or investment.”

Another topic van Gerwen mentioned in his speech was the distributed ledger’s impact on clearing. At this he sounded much more optimistic, acknowledging the advantages of using the blockchain in clearing operations, but, yet again, was cautious while commenting on the industry’s possible role:

“In principle proprietary traders don’t get involved in clearing. And yet the technological developments could lead to a situation in which a peer-2-peer model arises, with proprietary traders possibly starting to engage in clearing themselves.”

Further reading: Binance reportedly halts crypto derivatives service in Spain

The speaker encouraged the attendees to take part in DLT pilot cases that the Dutch financial authorities are managing in a sandbox environment.

In August 2021 the central bank of the Netherlands issued a warning to Binance for offering crypto services without the required legal registration.


Like it? Share with your friends!

What's Your Reaction?

hate hate
0
hate
confused confused
0
confused
fail fail
0
fail
fun fun
0
fun
geeky geeky
0
geeky
love love
0
love
lol lol
0
lol
omg omg
0
omg
win win
0
win
admin

0 Comments

Your email address will not be published. Required fields are marked *

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format