According to a report released by Nederlandsche Omroep Stichting (NOS), a Dutch news outlet on Jan. 18 the Dutch finance minister Pete Hoekstra has received official advice that a licensing system should be introduced for cryptocurrency services.

At the beginning of last year, the minister of finance had sought advice on cryptocurrencies from the central bank and the Netherlands’ Authority for Financial Markets. Hoekstra said that he had started acting on the information after receiving it.

Authorities Believe Licensing Will Help Eliminate Money Laundry And Financing Of Terrorists

The article notes that due to the decrease in the speculative crypto mania, investor protection has become less urgent and the emphasis has now been placed on preventing money laundry and terrorist financing using cryptocurrencies.

According to the publication, the Netherland’s Financial Intelligence Unit had noted that the number of unusual transactions using crypto had increased from an average of 300 to over 5,000 within a year.

The new proposed licensing system will require cryptocurrency exchanges and wallet providers to monitor customer transactions, and in case they find any suspicious activity to report to the authorities.

The companies are also expected to store customer information, and whenever there is an investigation, they should hand it over.

The Dutch central bank has already noted that companies will be tested before they are awarded licenses. One essential requirement will be to check if they can collect the required user data.

As you would expect, the members of the crypto community in the country are not happy with the news. Richard Kohl who is a board member of the Bitcoin Netherland foundation noted that the move was extreme for young innovative companies — adding that the new rules were a big backward step.

He was also concerned about the consequences of storing user data stating:

“Banks and financial institutions already need to keep track of customer and transaction information […] you may wonder how well our personal information is protected and used, such as how the Chinese government wants to be able to follow all transactions of all citizens.”