Tuesday, September 16, 2014

BPN 1688: Bitcoin exchange claims Dutch Central Bank license

The bitcoin exchange TradeBits presents itself on internet as "the first Dutch Bitcoin Exchange that offers its services to the market with the consent of the Dutch Central Bank." This is a remarkable message, because the Dutch central bank, DNB, recently warned against the risks of virtual currency. The Dutch newsletter Media Update checked out the story with DNB. A spokesman for DNB told, when asked for comment, that only institutions that are listed in the license register, are authorised to trade under license. A search in the register was inconclusive as to the name TradeBits. Telephone contact by Media Update with TradeBits revealed that DNB had announced by letter to have no statuary duty to supervise virtual currency. This was interpreted by TradeBits as a DNB approval. After consulting with their lawyer, the company recognized that this was a very broad interpretation. A spokesman for the company stated that the company would bring the text on the website in line with the letter of DNB. Upon publication of this blog posting the company still claims consent of the DNB, but in their FAQ they write: According to DNB the law on financial supervision is not applicable for the activities of Tradebits.nl.
On May 8, 2013 DNB has indicated in a press release that virtual currencies are unlikely to become a viable alternative for traditional currencies in the foreseeable future. On June 3, 2014, DNB warned financial institutions for integrity problems with virtual currencies in a press release.

In the Netherlands there are at least four bitcoin exchanges active: TradeBits, Clevercoin, Anycoin and Bitonic. The two most recently launched companies TradeBits, based in The Hague, and Clevercoin, based in Eindhoven both attempted to get a licence from DNB. Clevercoin claimed, according to the web publication Coin Courant that DNB let them know that they would get a preliminary exemption, until the rules would be clearer. 

Some facts about bitcoins, according to the Coin Courant
• Bitcoin is a digital coin.
• In 2009 bitcoin was introduced by the Japanese Satoshi Nakamoto, most probably a pseudonym or a group of computer programmers. 
• Bitcoins are generated over the internet by computers connected to the bitcoin netwerk.
• It is regulated that there will be maximally 21 million codes available.
• A bitcoin can be divided in smaller units like the euro and dollar.
• At this moment 12,5 million bitcoins are in circulation.
• In the coming years another 25 extra bitcoins per 10 minutes will be awarded tot computer programmers who provide computer power to keep the software for bitcoin transactions and who solve a mathematical problem fastest.
• The number of coins to be brought in circulation will be halved every time. In 2040 the maximum amount of 21 million bitcoins will be reached.
• The present exchange rate of the bitcoin is about 600 euro (Tradebits opened this morning at an exchange rate of 367 euro).

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