While Bitcoin (BTC) is accepted as the official currency in El Salvador, Dutch authorities have called for a ban on the cryptocurrency.
Pieter Hasekamp, director of the Dutch Bureau of Economic Analysis within the Ministry of Economic Affairs and Climate Policy, published an article titled “The Netherlands should ban Bitcoin.”
In keeping with the title of the article, Hasekamp has listed an extensive list that the Dutch government should impose an immediate ban on Bitcoin mining, trading and storage. According to the official, this could cause the price to drop, as Bitcoin “has no real value and is only valuable because other people can accept it.”
The executive supported the common anti-crypto sentiment, arguing that cryptocurrencies cannot fulfill any of the three functions of money as a unit of account, a means of payment, and a store of value. He also argued that cryptocurrencies are the tool of choice for criminals, citing other common anti-Bitcoin arguments such as security concerns, fraud and fraud risks.
Hasekamp said the Netherlands has lagged behind countries that have moved to “curb the popularity of cryptocurrencies” in recent years. “Dutch regulators have tried to tighten control of trading platforms, but with little success. The Central Planning Bureau drew attention to the risks of cryptocurrency trading in 2018, but concluded that stricter regulation is not yet necessary,” he wrote.
In his article Hasekamp emphasized Gresham’s law, a monetary principle that states that overvalued currency or “bad money” legally tends to remove undervalued currency or “good money” from circulation. Calling Bitcoin “bad money”, Hasekamp argued that Gresham’s law could work with Bitcoin in the opposite way:
“Cryptocurrencies show all the characteristics of ‘bad money’: uncertain origin, uncertain valuation, implicit trading practices. […] Gresham’s law back? No, on the contrary. Cryptocurrency is not used in normal payment transactions. […] Bad money is going out of circulation because no one wants to accept it anymore.”