Dutch Central Bank report on how to qualify money transfers where digital currency is utilised as means of transport

On 18 January 2019, the Dutch Central Bank provided recommendations for a regulatory framework and guidance on how to qualify money transfers where digital currency is utilised as means of transport.

Dnb dutch central bank guidance how to qualify blockchain based money transfers
— Dutch Central Bank (DNB) and Financial Markets Authority (AFM) about recommendations for a regulatory framework and how to qualify money transfers where digital currency is utilised as means of transport

The recommendations describe the case in which fiat money payments are transported (or settled) with digital currencies, exactly describing how Kable uses blockchain technology. For example, a buyer pays in local fiat money (e.g. EUR) for a product supplied by a foreign retailer. This fiat money is converted into digital currency at a local exchange. In the retailer's country, the digital currency is subsequently exchanged back into fiat currency (e.g. USD) that is transferred to the retailer. If the entire chain were processed by one party, then this combined activity would be considered to be a licensed activity (payment service). In this case, however, the chain is cut into four steps, each of which in itself may not require a payment license.

Kable liaises closely with the Dutch Central Bank on regulatory developments regarding money transfers. You can find the original report by DNB and AFM (in Dutch) here.

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