Dutch Central Bank rejects Bitcoin as viable alternative for traditional currency

The bank argues that the funds received bear no security measurements, as there’s no guarantee for balance returns following bankruptcy. Moreover, there’s no regulatory institution which should monitor whether virtual currency institutions have clear and responsible business operations, the same source cites.

In April 2014, the deputy director of the Dutch Payments Association, claimed digital currencies are technology, instead of money.

DNB also claims that virtual currency systems have everything but security, especially due to their decentralised set-up and no central party to deal with the responsibility of holding market players to account when they fail to comply with conditions for use, security demands, or legal frameworks, the same source reports.

DNB warning points out that virtual currencies take less than 1,000 transactions per day in the Netherlands, as compared with over EUR 16 million payments.

The bank also highlights that should most of the maximum number of 21 million Bitcoins be created around 2030, transaction processing costs will be regained from transaction fees.