Dutch Finance Minister on Crypto: ‘Supervision Is More Effective Than a Total Ban’

Last week, Dr. Pieter Hasekamp, the Director of the CPB Netherlands Bureau for Economic Policy Analysis (“CPB” for short) called for a complete ban on crypto; however, finance minister Wopke Hoekstra does not agree.

Here is a little information about the CPB and its goals:

Literally translated, CPB stands for ‘Central Planning Bureau’. This has been a misnomer from the start, as CPB has never been engaged in economic planning. It analyses the effects of current and future government policies. Hence, our English name: CPB Netherlands Bureau for Economic Policy Analysis. However, because CPB is so well known in the Netherlands, we keep the name our founders gave us.

CPB is a part of the Ministry of Economic Affairs and Climate Policy. Its director is appointed by the Minister, in consultation with other members of the government. However, CPB is fully independent as far as the contents of its work are concerned. It also has its own legal mandate and an independent executive and advisory committee. This Central Planning Committee (CPC) is currently chaired by Hans Smits.

Last Friday (June 11), the CPB director published an article titled “Nederland moet de bitcoin in de ban doen” (which means “The Netherlands must ban bitcoin”).

Hasekamp’s article started with:

“‘Bad money crowds out good money.’ Gresham’s law predates economics itself. As early as the 16th century, Gresham saw that high-quality coins eventually disappear from circulation. Payment systems switched to impure coins, and later to banknotes and cashless money. The rise of cryptocurrencies such as bitcoin seems to fit this pattern. Cryptocurrencies exhibit all the hallmarks of ‘bad money’: unclear origin, uncertain valuation, shady trading practices. Is Gresham’s law back?”

He then went on to say that private crypto assets are very different beats from central bank digital currencies (CBDCs):

They perform much worse than government money on all counts. There is no value retention, ease of use suffers from a lack of acceptance and security is undermined by outright scams. Cyber ​​transactions only score well on the aspect of privacy – and that anonymity is exactly what makes them attractive to criminals.

Cryptocurrencies are therefore unsuitable as a unit of account and means of payment outside the criminal circuit; its use as a store of value is based on the hope that cryptocurrencies will one day replace real money. But that’s not going to happen.

Cryptocurrencies are essentially neither money nor a financial product, but an example of what Nobel laureate Robert Shiller calls a contagious narrative: a contagious story in which people believe because other people believe in it. Gresham’s law is replaced by Newton’s law: what goes up, must come down. The ultimate collapse of the crypto bubble is inevitable.

He then said that it was time for his country to curb the crypto hype:

Several countries are now taking steps to curb the crypto hype, due to harmful consequences – fraud, criminal use, gambling addiction, financial instability, not to mention the enormous energy waste in production. It was announced this week that, following a previous trade ban, China is now also blocking bitcoin accounts on social media.

The Netherlands is lagging behind: attempts have been made to tighten up the supervision of trading platforms, but without much success. In 2018, the Central Planning Bureau pointed out the risks of crypto trading, but concluded that stricter regulation was not yet necessary. But cautious regulation can also backfire: It legitimizes crypto as a bona fide financial product.

Well, later that day, according to a report by Dutch news outlet NU.nl, Wopke Bastiaan Hoekstra, who is a Dutch politician serving as Leader of the Christian Democratic Appeal since 2020, as well as the Minister of Finance in the third cabinet of Prime Minister Mark Rutte since 2017, said that although he understands the CPB director’s concerns about crypto, it is better to supervise crypto than to ban it:

My observation is now that that is more effective than a total ban in the Netherlands.

Hoekstra apparently believes that “it makes no sense to only announce a ban in the Netherlands.”

David El Silvador Rosa, who works at Ledger, took to Twitter to offer an extensive rebuttal of the CPB director’s article:

(Photo : Gallery)

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