Contemplating 75 years of freedom: a dark story on three Dutch lessons never learnt

First of all I must warn all readers. This is not a happy blogpost. It is not funny. It is a dark and sobering tale of lessons that we should have learnt in the Netherlands. A tale about lessons that we never learnt. Lessons that still hold immense value today. Lessons that we owe it to be taken to heart when we reflect on the 75 years of freedom that we will celebrate next week.

From Rotterdam to Amsterdam: records and track records

This post connects two cities that I lived in for the longest time in my life. First of all; Rotterdam, the place of my birth. It was bombed to ashes early on in WorldWar 2. Except for one place: the city hall. Reason being? That's where the population records were. Cunning Germans, as my dad explained to me. 

Next up is Amsterdam, where the Anne Frank house and her statue form the background against which new children grow up in freedom. Where Stolpersteine remind us of those who lived here before us. Where the elder lady with her dog told us what is was like to grow up here. How the Germans were raiding the houses and pushing their bajonets into the ceilings to discover if people were hiding.

Amsterdam is the city of the 'dot-map'. It is the map that the Amsterdam city administration drew up on request of the occupying Germans, that wanted to know: where do the jewish people live?

It sounds like a simple question: an administrative thing, strange request perhaps, but why not just answer it? Let's cooperate collaborate. So the map says: One dot is 10 jews. Take it in and look history in the face.

The particular situation here in the Netherlands (J.H.Blom - source) was that our government had fled and the Germans put their officials in charge of the Dutch civil servants. This is a marked contrast with Denmark, where they let the Germans enter with the military but stayed in office and controlled their bureaucracy.

There is a lot more to read in the study of Blom but one of the very striking elements is the efficient bureaucracy in the Netherlands, in combination with a tendency to cooperate and answer properly to Authority. Whichever the source of Authority.

The very sad fact of the matter is that after the war we could learn that in Western Europe, the Netherlands turned out to be the country where 75% of its Jewish population died, as compared to 40% in Norway and Belgium, 25% in France and almost 0% in Denmark.

If we look history in the ugly eye, this is (literally) a track record that the Dutch must carry as a scar on and in their souls. A fact that obliges us to honour the deceased and make sure that we learnt something. But do we really?

History is distant and can be easily forgotten
This is all maps and statistics from earlier days. If we wish we can look away and forget. So let me warn you as I bring the lesson closer to home. To this end I draw on a pre-Corona visit that I paid to the excellent exposition covering 300 years of insurer Stad Rotterdam. now ASR. During the visit I stopped by and looked at the part on World War II, where I bumped into someone who turned out to have contributed to that part of the exposition.

He is a commited lawyer who until today still tries to resolve the administrative wrongdoings of the past. His story on what he found in archives, on what he did not find, was very sobering. He had seen files where a fanatic anti-semite employee hammered a J multiple times on the insurance policies of Jewish clients. And he explained how the Germans would start out with simple requests with more serious consequences kicking in later.

A typical example of this is the introduction of a generic duty to register and issue personal ID-s. This was formally introduced in October 1940 in the Netherlands and came info effect in April 1941. And then, one year later, all IDs of Jewish people needed to be stamped with a J. So we see bureaucratic evil of the end made possible by fairly innocent baby steps in the beginning.

Administrative witnesses of the insurance sector: during the World War 2
One of the most well known German tricks pulled in World War 2 in Amsterdam was the take over and manipulation of the Lippman Rosenthal brand by setting up a sort of second bank or branch-office with the same name. This second office was effectively German run and a 'robbery-bank' that sold off assets of Jewish clients. This bank plays a sinister role in the documents that I will be publishing here.

It started out with a request that Jewish people declare to their bank that they are Jewish, as via a specific Regulation, the only bank paying out the life insurances would be the Li-Ro-robbery bank. Here's the snapshot of the regulation and the form to be filled in.

Regulation outlining obligatioo to insurers to pay out
their clients only via the Li-Ro robbery bank

And here is the form and letter that people were sent. Please declare yourself to be Jewish.

Form with request to fill in if you are Jewish or not

Now the involved insurers didn't really all like this idea and they figured out: if we don't know for certain if someone is deceased, we can't really transfer all the money to Li-Ro bank. So the exposition shows a bank writing to the Li-Ro bank on this specific issue. 

Now beware of the answer which dates to January 1943.  I will translate it here:

Through the contact that we have with the relevant authorities we have been informed that Jewish people that have been deported by government order will be totally taken out of the society and nothing will be ever possibly heard of them. As a result they are, sort of automatically, also completely annihilated in respect to your administration but we note that, if no further measures are taken, their remaining insurances would continue to exist.

It will be clear to you that the circumstances in which the aforementioned Jewish people find themselves in society - but with respect to you as well - have lead to a situation that is equal to that where an insurance policy ends due to the death of the insured, which means that we need to find a way to bring those insurance to a pay-out.

We invite you, the pay to us the relevant reserves that you have amassed to this end, while deducting a considerable reward for the risks that you have taken.We look forward to your proposal.

Administrative witnesses: after the war
Imagine that you survived this World War 2. And that you want to claim the insurance funds that you are entitled to. And the response being: please can you prove that the person you are referring to is actually dead? Survivors of the war atrocities had to endure long and terrible administrative procedures to restore their rights.

Here is a witness that matters. It is a letter dating from 1950 and it is a declaration by a Red Cross official. It specifies the dates of deportation as well as the names of three survivors who have had to make a personal declaration to the Red Cross. It says that

... it is clear from the declaration of those three people (out of 33.000 deported to Sobibor), who stayed of a longer period in time in the camp, that almost all people that came to Sobibor were almost immediately being suffocated by gas and cremated afterwards. Given that nothing has ever been heard since the conclusion is that the person in question has died on 11-6-1943 of the consequence of suffocation.

No happy ending.... 
There is no happy ending to this story.

Survivors had to fight administrative wars and it took until 1999 before some sort of settlement was made between representatives of the Jewish community and the Dutch Insurance Industry. Part of the settlement is that a Foundation for individual claims SJOA has been set up. And until today the foundation is still actively assisting and doing research to do justice.

Which brings me full square back to my neighbourhood in Amsterdam. There are not just the silent physical reminders of history, the Stolpersteine in the streets. We also find reminders on the web, in this list of holders of insurance premiums. If I type in the names of the streets around me, their names come back to help me remember what happened.

Three lessons to heed...
We, society in general but the Dutch in particular, owe it to all of those who gave their lives during the war, hoping for true freedom, to heed three lessons we appear to have never really learnt:

1- we must better understand the mechanics, the workings of records, administrations and bureaucracies and the ease with which what looks like a legitimate government action can turn into an evil one that starts a persecution on illegitimate grounds,

2- we must remember that it is the atrocities of World War 2 that made us formulate the Human Rights Declaration, which formulates the fundamental rights that protect us,

3- we must cherish and protect our fundamental right to privacy as one of the most important defenses against bureaucracies turning evil.

Perspectives on (Ca-)Libra #2: On the Libra association (board) and business drivers

First of all apologies to many of you: I promised a blog on the reason why Libra would not qualify as e-money, but please accept my rain check for that. Right now, it is the day after constitution day for Libra. An event coloured by the absence of many payment industry players, that indeed felt the pressure of competition law too big to be able to join.

So yesterday, the Swiss association was set up, and we got a glimpse of more information on the organisation. I will discuss the ramifications and conclusion that we can draw later this afternoon in the Dutch radio-broadcast BNR Digital News. And this blog contains a brief analysis, which builds on my first blog that identified a couple of smokescreens by Libra.

My brief summary is basically:
- it is still a Facebook/David Marcus show, disguised as an independent association: the governance is still substandard in terms of industry best practices,
- Facebook has the fear of losing Africa to the Chinese and Libra is instrumental in helping them establish the foothold,
- Kiva and Payu are seeking actual microcredit expansion with practical product offers and Libra will be their vehicle,
- PayU, Andreesen and Xapo are regular VCs, in it for the money. If you're daring enough to step into bitcoin early, why not do the same with Libra? Worst case you lose a little money, best case, you're more on top of the world than ever.

The longread is below, but note that it is still only scratching the surface. Readers and other journalist may further research and draw additional conclusions.

Governance: still shaky
As it stands, the board that is now chosen has released info on its charter which is still very brief. It shows five board members which appointed three staff members of the Libra association. Interestingly, the head of the association is also the chair of the board and the PR role acts as the deputy chair. This is atypical, but my guess is that this is done to avoid the impression that David Marcus effectively pulls the strings.

If we compare the setting that has been now created with the one that the Dutch Payment Association has set up (after long deliberations and scrutiny by many lawyers to make a well developed governance structure) we can see some differences.
- Libra has no independent board directors
- Libra's chair of the board is also the head of the working payment organisation
- Libra has no formal Board of Appeal to deal with questions of acceptance as members, certification with respect to services/complying with rules and regulations.

The Dutch rules state:
An independent Board of Appeal makes it possible to appeal against decisions on acceptance and certification when parties are unable to reach agreement with the Executive Board, the Board and finally with the Appeals Committee of the Board.

And then an observation on what is missing. The association now has a director, a business development person, a policy/communication person. But not.... a legal council/compliance expert. As if the past months with all the varying regulatory discussions haven't happened at all. This is a very telling ommission; the organisation is all about commerce and not about compliance (but we knew that already...).

There is a lot more to say here, but I stand with my former analysis: the governance is ill conceived and not up to standard for a normal payment scheme/provider that Libra wants to be (as they announced in September to go for at least a payment license in Switzerland.

Libra members: three payment institutions remaining, not one
Reuters incorrectly informs the public in their article that the only founding member that is into payments is PayU. They missed out on the fact that Uber and Coinbase are e-money institutions which also act as payment institutions.

Of those, Uber is the youngest kid on the block. It ay either be too new to payments to understand the ramifications of the proposed governance or the underbidding and breaking of regulation may be part of the business strategy and it sees no risk here. Coinbase interestingly only has a UK license as e-money institutions and where most EMIs have their backup Brexit-license in place I don't seem to find it for them. I expect them to have a workaround or whitelabel agreement at hand however.

We should be paying more attention to Coinbase, as it is the linking pin that connects the five current board members. Also Vodafone (exempt under EU payments legislation) should not be forgotten (see PS1) as it has long standing unchallenged experience in avoiding proper banklike regulation of its payments processes.

The Board Members; interesting incrowd
Now what is Libra really up to?
For that we need to do a deep dive into the people and relationships.
I'll make a start below, but this is only scratching the surface.

The idea behind is that recruitment of board members always has a certain dynamics. In the Netherlands it is a well know fact that through charities (like the board of the Concertgebouw) top level executives meet and do networking. It also serves as a recruiting platform for next board members.

With this in mind we can see that Coinbase, Paypal and Kivi are the entities that connect the dots between the board members. And in essence, we can see that it is David Marcus who is at the center, having received what appears to be a blanc cheque from Zuckerberg to make this happen.

Therefore, let's start with David Marcus of Calibra (a Facebook tech subsidiary in US; interesting choice given the fact that Facebook Payments also holds e-money licenses in Ireland). Marcus is a serial entrepreneur, coming out of telco environments, with one of the companies being bought by Paypal and thus ending up at Paypal. He then moved to Coinbase and shortly thereafter Zuckerberg scouted him for the Facebook/Libra plan.

Marcus via Paypal to Ellis
He has worked together at Paypal with Laurent le Moal, who heads PayU. So there we have connection number one. Do note that the PayU representative Patrick Ellis is primarily a lawyer, but not with payments background. He is more a securities regulation guy with African and South African experience.

Haun via Coinbase/Cesares to Horowitz
Connection two is with Katie Haun from Andreessen Horowitz. She is a former prosecutor who was firmly into all kinds of legal cases and bitcoin dark markets. As such she undoubtedly also came in contact with the Winklevoss twins and most likely may have met Wences Cesares as well. Her work in crypto-land led Coinbase to invite her to their board: a classic defence mechanism to ensure good contacts with legal prosecutors/supervisory community. This board role at Coinbase resulted in an invitation to work at Andreessen Horowitz, where she manages a huge VC fund that invests in crypto. The people hiring her said: 'She is a credible face for crypto'.

Cesares via VC world and Paypal
Connection three is Wencles Casares of Xapo Holdings He set up on online financial firm early on, which was subsequently bought. Onwards he setup Wanako Games (with exit), Lemoncard (with exit). The he was smart to set up a safe storage facility for bitcoin for the super rich that invested early in bitcoin. So he is a serial entrepreneur, now well taken care of due to all the bitcoins in his possession (we can assume he is a whale and sometimes see him retweeting large bitcoin movements on the blockchain). Xapo itself was funded by the VC Community involving.

His involvement in charity can be tracked into his participation in Viva trust, aiming at financial inclusion in Latin America. Later on he also served as a board member at Kiva (which accidentally also holds a seat on the board of Libra). And then of course, he is still a board member of Paypal, so there we have some dots connecting. So he is smart, rich and you may want to see how in 2006 he bought a nice real estate venue to live back home but returned to California later. The house is now part of a charity foundation and acts as a meeting point/venue for businesses and such.

Davie via Kiva/Paypal (Prenmal Sha) and Cesares (Kiva-board)
Connection four is the connection to Kiva Microfunds. Matthew Davie is s serial entrepreneur, pretty much involved in the strategy area of this longtime charity. Do read this article on how Kiva was set up as peer to peer crowdfunding and further developed into a lending platform. This has inclusion written all over it. And Kive, by the way, since the start did all its payments via Paypal. This was due to their contact with Premal Shah, who had also been experimenting with his own microfinance project while working at PayPal. So again, dots are connecting to the Paypal line, with a crossover to the VC community via Cesares.

Again, there is a lot more to say, but I leave it up to the crowd to further investigate.

Business proposition and drivers
As for the business drivers, you may want to look into what Kiva is doing recently. It is setting up a Kiva Protocol in Sierra Leone, to do microcredits based on reputation. My good friend Dave Birch has been very keen on identifying early on that this was one of the future points for Libra already mentioned in their plans. So Kiva is basically doing the proof of concept for phase 2 of Libra.

Next up to PayU. They are not just a payment processing company, but also a VC company owning reddot payments. And that is a company that brings Wechat and Alipay to Africa. Even more notable is that they own a large share in Tencent (Wechat) and their role as a big investor in the payments game. What is interesting here is that PayU thus seems to be introducing the Libra competitors into Africa. At the same time they join the initiative that seems to be set up to counter this development.

Because this much is more clear to me now. Facebook has the fear of losing Africa to the Chinese and Libra is instrumental in helping them establish the foothold. Kiva and Payu in the meantime are seeking microcredit expansion and Andreesen and Xapo are regular VCs, in it for the money. If you're daring enough to step into bitcoin early, why not do the same with Libra? Worst case you lose a little money, best case, you're more on top of the world than ever.

Further blogs: on definition and e-money and securities regulation in Eu
I promise, the blog #3 will come. But first I hope this blog inspires many people to do some further digging.


PS 1. On Vodafone, mpesa and payments
John Maynard pointed out to me that Vodafone and Mpesa also come into play here. Which is true for two reasons. First of all as part of the business opportunity in Africa and the desire to seek solutions that go beyond the one country. Cryptically speaking one could say that Mpesa itself may be the result of incidental local stakeholder constellations rather than the logic of business and regulation.

But the second reason is that effectively, the mobile operators have a great record of ducking relevant e-money legislation in the EU. If you would browse many pages of history of the e-money directive and a number of mobile phone payment initiatives (feel free to do so here) you will see that At some point in time the EU mobile operators succeeded in getting an exemption in the PSD2 and the e-money directive of the net-effect that funds on mobile phone accounts will not be considered e-money or funds under the payment services directive, even though they can be used to make sms-payments or added-service payments.

The trade off in those days was that mobile operators had just paid huge sums for 3G licenses and lobbied the Ministries of Finance via their Ministries of Transport/Telecommunications to call for a specific exempted regime for electronic money when residing on a mobile phone account. I still see this as one of the best executed bank-lobbies by non-bank institutions, which prevented the whole e-money directive being applicable to them. See also this website 11a2.nl  or read this consultation feedback that tries to provide this adhoc idea with a reasoned basis.

Therefore, when we look at the EBA payments institutions register you will thus see Vodafone being exempted for their payment business. They have a long standing experience in being able to duck e-money regulation and avoid the rational interpretation of regulation and may well be thinking that with the power of Facebook behind the initiative, this may also work now. This holds particularly true if your aim is not the developed market, but to capture the underdeveloped market in societies which have less robust regulators and supervisors.

PS 2. The team doing the association work: David Marcus reassembles colleagues
- Managing director of Libra. Betrand Perez has had some tenure with Paypal and also worked at Zong (the David Marcus company that Paypal bought). The same goes for Business Development person . Kurt Hemecker. So we can see the classic recruiting movement of having a soccer trainer taking along some of his trusted players to the new club.

- Head of Policy and Communication is Dante Disparte, a profiled professional with Harvard Business School and NY Stern education and diverse work experience. I sense a flavour of business and geopolitical work experience, related to national security. This can also be seen in repeated statements from Marcus outlining that for the US to keep its role/position, Libra is a necessity (in order not to let Chinese take over everything).

PS 3. What's the rush: the Chinese central bank on its heels
In response to the Libra initiative, central banks are now reconsidering the relevance of issuing central bank based digital currencies. The Chinese central bank is actually moving forward very fast in this respect. It appears to use similar concepts as Libra and thus develop a state-owned issuer of e-currency. See the Coindesk article here.

My personal take is that it may not have to be the central banks, but could be the Ministries of Finance that take up the issuance of digital coins (just as they usually mint the physical coins). But that is a whole different discussion, laid out in this article: The Full Reserve Bank is up for grabs.

PS 4. And of course the VR/AR angle
I almost forgot. Introducing a new currency into a real world does not make a lot of sense, as existing currencies and e-money may be more efficient. But imagine that there is a virtual agumented reality world / economy. You convert fiat money, step in and then use the game money. Like the Second Life Linden Dollars. But it's not a game and game money any more. It's IOUs of central bank Libra (aka Facebook). That may well be the end game (and first mover advantage) that Zuckerberg is seeking.

Zimmermans' relevance for discussions on human rights and ICT-security surveillance

If we look at economic and social risks of new technologies, outsiders will often immediately fall into the trap of considering this to be about the illegal use of peer-2-peer networks, applications such as bitcoin etc, for socially unwanted activities or even criminal activities. From there on it is a small step to forbid such activity, regulate it, overregulate it. But we should take a wider perspective here.

For me, Phil Zimmerman was the person who made a lasting impact, when he explained, somewhere in the late 1990s, during a speech at a digital money conference his considerations behind developing Pretty Good Privacy (see also his explainer himself: Why I Wrote PGP). His argument was mainly that the new digital society has to be built in such a way that it guarantees a situation in which a people are still able to communicate and act in way which is not invaded or controlled by government tools/techniques. Whereas the old analogue world would allow the people smart analogue ways of creating their own spaces for communicating and fooling government with fake analogue id's and such, it would be much harder to do this in a digital world. Hence the need for a peer-2-peer simple mechanism as Pretty Good Privacy.

Zimmerman outlined one very significant theme during his speech. He noted that the assumption of a continuous benevolent government is not realistic. Governments come and go, some may be more democratic than others and even strong democracies may turn into dictatorships, depending on the circumstances. It is therefore important to design society, governments and the technologies that we use to manage society, guarantee that a balance exists between the powers of government and those of the public. The public, the people should always be allowed to remain digitally out of sight of government. Such a robust structure would be important to ensure a fair treatment of the people over a long period of time.

It is clear that this requirement: to allow for and to actually create areas where the government cannot see what happens means that those areas are scary for regulators. Will they facilitate crime by doing so? Perhaps. Will they allow for huge pockets of creativity? Certainly ! But it will be the strong governments that are able to allow this. They will act from a position of strength and not be afraid. The weak governments, or the scary governments, or the ill-intending governments will seek to monitor everything and control all digital activities. This will certainly fail. But while doing so, they may instil tools that are very dangerous tools in the hand of governments when they turn from benevolent to evil. It will tilt the balance towards a situation that ill-intending governments can no longer be overturned by a social revolution.

There is no need for governments to be afraid of technological progress in the hands of the people. It is a good thing, to be cherished and to be allowed. The simple labelling of such activity as possibly criminal is the wrong frame. The reverse is also wrong: regulators with good intentions are not by definition tools in the hands of dictators. The right frame is: dictators exist just as criminals. Society should ensure that neither of these can become too powerful due to technological of legal measures and it is for this reason that we need to balance our human rights to privacy with the goal to prevent criminality.

Finding this balance is not easy but over the last weeks we have witnessed too many occasions where governments seem to go to far. German police wanting access to home devices. The FATF-ruleon surveillance for virtual assets. Ghost accounts into Whatsapp. Giving your social media handles when entering the US. We should not let ourselves be caught in this wrong direction over intrusive government behaviour.

There is a very legitimate reason to develop and create new technologies that safeguard the public and it is a pity that many policy makers in the world may not have been hearing the clear message that Phil Zimmerman sent them. They really could do with open their minds more. So for them I’m embedding this video. Just to be able to learn from history.

Why Bitcoin Core and Bitcoin cash both make sense !

The other day I was reading an excellent blog by Vinny Lingham on the differences between Bitcoin Core and Bitcoin Cash. What I appreciated very much is his attempt to take the heat out of the intense discussions between 'followers' or 'supporters' of these two bitcoin types. And his overview inspired me to reflect a bit more on the reason why actually both Bitcoin Core and Bitcoin Cash make a lot of sense and why there is no need for petty bickering given the open source philosophy on which both protocols are based.

Essential philosophy of Bitcoin: everyone may participate in each role

If we look at the design philosophy of bitcoin, the essential idea is that all participants may act as a user or a producer (miner) at the same time. This is very much in line with all other P2P business models that we see emerging, based on networked technology. With AirBnB, owners of houses also become producers and numerous other sharing platforms seek to achieve the same.

The combined producer/consumer role in bitcoin is very much in line with the design principle to outsmart the centralized institutions of a central bank that issues fiat-currency or with similar players as banks which have their own specific their role in the money-value chain. 

However, the obsession with the dominant role of central banks and banks is so strong in the bitcoin world, that there is too little attention for standard logistics/economics, when looking at the basic proposition of provision of payment services by all to all. So let's have a look at those logistics.

Logistics of any peer-to-peer value exchange system

Anyone participating in payment systems will recognise that a full peer-to-peer system is intrinsically inefficient. Imagine a market fair where all participants are both buyers and sellers. They could pay each other after each sale and hand over cash or other payment instruments. This provides everyone with instant security and payment, but also with cash in hand and time spent to make and accept payments.

Now, if the fair happens regularly, some smart participants will come up with a more efficient idea, which is to not pay after each sale, but to keep track of all payments and net out the payments via clearing cycles. Effectively this is what already happened during the payment days of late medieval fairs and can be witnessed in all kinds of informal or formal constellations (clearing houses etc) that have come into existence since then. 

The conclusion is therefore that, wherever payments are made, at some point in time a new underlying structure will evolve in which specialisation occurs. Those that are very active participants will have different roles and interests than those that only use it sometimes. And it's the active community that will seek some efficient alternatives, while the less-active part will go with the flow. Eventually you will end up with a specific constellation that works for that payment community. 

In these constellations, you will see distinctions in roles such as:

- small users

- big users

- big providers of payment mechanisms

- clearing agents for providers

- settlement agents for providers

- super settlement agents (mostly, but not necessarily, central banks).

The inevitable specialisations in the bitcoin community

If you start a payment system, such as bitcoin, from scratch by allowing everyone to fulfill every role in the system, economics dictate that in the end specialized roles will occur. We've seen this happening early on with the difference between light-wallets and full nodes. Similarly different players have chosen to serve a different part of the value chain.

In the context of an open source protocol, it is just as inevitable that opinions differ on the most efficient way forward. And that's where both Bitcoin Core and Bitcoin Cash have a valid proposition. 

As the blog by Vinnie Lingham outlines, the Bitcoin Core community sticks with the idea that as a design principle all users must be able to run a full node. Scaling and performance issues for the payments mechanism can be solved by adding an outside transaction layer, meaning that Bitcoin Core chooses to be the settlement layer (in classic payment terms). 

Bitcoin Cash on the other hand takes the economics of payment systems as a starting points and accepts the economic reality that in practice, the majority of bitcoin users will not (and cannot) be producers at the same time. Their philosophy is to not tamper with security choices in the area of digital signatures but simply increase the block size, in order to cater for the end-user need to have easy, cheap, simple and fast value transfers. In doing so, they remain IMHO closer to the original idea in the Bitcoin paper (provide an alternative easy fast and cheap transfer mechanism) than Bitcoin Core. 

Stop bickering please !

I am amazed at the amount of energy and emotions that are wasted in the crypto community in what comes down to petty bickering. Whether this is between Bitcoin Core and Bitcoin Cash or between whichever of the other cryptocurrencies, blockchains or DLT-designs. 

It is and was inevitable for the bitcoin protocol to run into the standard efficiency problem for evolving payment and settlement mechanisms. It is just as inevitable that different solutions exists and both Bitcoin Core and Bitcoin Cash are equally valid. The one just wants to end up becoming a settlement layer provider while the other wants to be stick to the user layer of payment systems. Where is the harm in that?

The open source philosophy means that we will see in practice which solutions play out best for the ecosystem(s) and rather than bickering about advantages or disadvantages we should cherish the variation and choice that the open source philosophy brings. 

Cryptocurrencies, initial coin offerings (ICO's) and tokens: we remain puppets on someone else's strings !

Screenshot www.flippening.watch 

Now that the bitcoin price is heading towards $10K and beyond, we see another wave of interest in the cryptocurrency domain. Regulators warn about the risk of Initial Coin Offerings and news bulletins keep on re-discussing what is happening in this space.

It's a matter of private currencies and tokens
What we are looking at in the cryptocurrency, blockchain and distributed ledger space is that seemingly public and democratic technologies are being put to work for specific groups of individuals/companies. While the technology may be sold as serving a public purpose, in the end it's just a variation of any medieval local Duke issuing his private currencies to the population: profits to the Duke and potential losses to the public.

What is happening now is a convolution of low interest rate regime, overhyped media and greed, leading to private individuals scrambling for profits in the area of cryptocurrencies. They can do this either by investing in the cryptocurrencies themselves or as an entrepreneur by sharing a mining pool, setting up exchange's or trade functions or developing new token types or blockchains. And as with the gold rush, it will be the sellers of shovels and buckets that will in the end really make the profit.

Beware: we remain puppets on a string
While in the initial stages of the bitcoin blockchain, we could see a whole lot of alt-coin scams, we are now seeing a range of ICO-scams, as people are exploiting the ethereum capabilities to venture out in the cryptocurrency world. Only a very few of those will survive and the rest will disappear just as the nonsense alt-coins did.

So, whoever participates in cryptocurrencies or ICOs deliberately hands in governance to an unknown constellation of companies and individuals. Or as I put it in this 2013-blog:

The redistribution of value that can occurs with these new currencies may look democratic, but that is a wolfe in sheep' s clothes. Effectively the new currencies are and will be the domain of private individuals trying to seek private gain rather than anything else. And there is no guarantee whatsoever that this constellation will have the interests at heart of all people in society. 

It will be Darwins' survival of the fittest all over again, which will exclude certain groups of citizens from participating fully in society. As democratic as a crowdbased currency looks: you will still be a puppet but on a different string, with unknown gains being made by unknown players in the value chain of this collective currency. 

To bubble or not to bubble? 
The question that is now on the public table: is the value of bitcoin a bubble as the tulipomania? Despite the tendency to say yes, I would argue that the answer could effectively be no.

First of all, the whole western money system is a bubble right now, as central banks have inflated our financial systems to an enormous degree with the Quantitative Easing. We should realize that neither bitcoin nor any other good in this society has its proper value right now. Thanks to these central banks, the amount of money that I get in my savings account has been too low for almost a decade now.

Second, within this skewed monetary world, market-forces do still apply. They will also apply to bitcoin-core so that with each fork (bcash) or new blockchain (ethereum, eos) a potential new competitor may turn out to become the winner. The word used for a shift in this momentum is: the flippening (as sentiment may flip to different assets or infrastructures in a very brief moment of time).

The interesting thing is of course, that in this digital world, anyone can monitor this real-time on sites such as Flippening Watch. It will be like watching the strings of the puppets move, without knowing who the real players are.

DAO-fork at odds with Ethereum terms and conditions

Last month, Antonio Madeire nicely summarized the discussion on the DAO-hack and the fork which brought Ethereum classic into being. I remember that my contribution to the discussion at that time was that the Ethereum developer community should not revert to a hard fork but to the judge and/or arbitration.

Governance and terms and conditions
The other day, I was discussing with Ian Grigg, a long time mutual topic of interest: making technology work by adding proper arbitration to smart contracts and agreements. This can even be done in code, as he had demonstrated way back in the 1990s in his ricardo system.

This prompted me to actually take a look at the Ethereum terms and references to see what it said about disputes. Well, have a look yourselves:

All disputes or claims arising out of, relating to, or in connection with the Terms, the breach thereof, or use of the Ethereum Platform shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with said Rules. All claims between the parties relating to these Terms that are capable of being resolved by arbitration, whether sounding in contract, tort, or otherwise, shall be submitted to ICC arbitration...... 

.... And so on.

What does this mean for Ethereum governance?
While I hugely appreciate the development of Ethereum and all the efforts that have gone into it. it does strike me that when push came to shove, the developers brushed aside their own terms and conditions. The use of Ethereum was instrumental to setting up the DAO, so why not revert to the ICC Arbitration?

My guess would be that, not being lawyers or into governance, the developers used the tools that came in handy and quickly. Alternatively, it might be the case that they might have invested in the DAO themselves quite considerably.

Regardless of the exact reasons behind not using the dispute resolution mechanism, the paradox is that, while there is a formal basis for dispute resolution under Ethereum, the likelihood exists that in future instances of trouble, the developers will again fork their way out of trouble.

Create an additional dispute resolution layer.
Any practical use and implementation of Ethereum should therefore come accompanied with additional agreements on dispute resolution, so that organisations that cooperate on the basis of the ethereum blockchain create their own governance basis.

From DNB Coin to ECB Coin...?

About a year ago, it became clear that the Dutch central bank, much like other central banks, was actively experimenting with blockchain technology to further establish pros and cons of distributed ledger technology. It had developed a so-called DNB-coin - a private fork of the bitcoin blockchain - which further reinforced a whole discussion on central bank issued bitcoin-like currencies (Fedcoin as outlined by the blog of JP Koning).

Fast forward to the EU parliament, where last week, rapporteur Cora van Nieuwenhuizen presented a draft Fintech report, that calls on the European Commission to draw up a Fintech Action Plan. And in this plan, under item number 6, the ECB is recommended to launch experimentations with a 'virtual Euro'. I think we may dub this as the call for an ECB-coin.

One can only guess what exactly would be meant here, but my best guess would be that this means the ECB can now freely choose to experiment with methods for distributing digital euro's using advanced blockchain or distributed ledger technology. So would they design it themselves, or involve themselves into market initiatives such as R3, Hyperledger?

Anonymous ECB-coins or not? 
Time will undoubtedly tell how this experiment with ECB-coins will evolve. We should note however that, there is also a European legislative initiative to limit the use of cash. So it appears logical that the cash-limiting initiative could reinforce the development of central bank issued virtual currencies (i.e. euro's on a blockchain).

Those will not be truly anonymous ECB-coins, if you ask me. Close reading of this last legislative proposal, I noticed that anonymous digital currencies (such as the good old digicash) are not truly desired:

In view of the development of cryptocurrencies and the existence of other means of payments ensuring anonymity, an option could be to extend the restrictions to cash payments to all payments ensuring anonymity (cryptocurrencies, payment in kinds, etc.) 

The end of anonimity and begin of pseudonimity 
In sum we will be watching the end of anonimity, but this may not be its true end. I think it would be fairly easy to device new business and payment models where one slices off the good-reputation of a payer/payee (not blacklisted, no terrorist etc) into a pseudonomous, tokenised system that allows payer, payee and all involved financial institutions not to know each other but still transact securely and within the legal parameters as set by society.

Which most likely brings us back to square one: the blockchain.

'DNBcoin': the Dutch central bank experiment with a blockchain-based coin

Today, the Dutch central bank published its Annual Report. This coincided with the death of our most famous soccer player, Johan Cruyff, so it's clear that there is not so much undivided attention to their whole report.

 Scanning through the report, I noticed an interesting paragraph in the sustainability-part of the report (p. 208), under the header of inclusion and accessibility of payments. It stated that DNB aims to develop a working prototype DNBcoin based on blockchain technology.

So, there we have it: central banks are entering the market of digital cash once again. After the announcements on RSCoin, the blockchain based electronic cash proposed for the UK central bank, the Dutch central bank is following suit.

So is this new and revolutionary?

No and yes.

No, because I recall that twenty years earlier, the Danish central bank sold its electronic cash solution (Danmont) to the market (withdrawn as a micropayment tool in 2005), as did the Canadian central bank (selling of its Mintchip). So there is not much news in central banks setting up electronic cash. 

What is new however is the environment in which this development occurs. Previously, central banks were keen on getting rid of cash as an inefficient payment method. As this starts to be succesfull (in Sweden and the Netherlands for example) the central banks adapt their position. The policy line now is that for availability and financial inclusion reasons cash still needs to be around as a payment mechanism.

So when we now see central banks moving forward in the electronic cash domain (now conveniently labelled: blockchain/fintech, instead of bitcoin) it might be to no longer spin it off to the market, but to create a permanent digital replacement of cash.

Therefore, this time it might be different.

Satoshi rumours reminds me of being John Malkovich

These days, there's a rumour going around that an Australian guy would actually be Satoshi, the inventor of bitcoin. Next morning, this guys house was raided by the police, in search of all kinds of evidence.

To me, it seems sufficient evidence to assume that the true Satoshi will choose never to reveal his or her identity. If all kinds of law enforcers incorrectly wish to blame the inventor instead of the users of his invention, you better steer clear of such hassle.In addition I could well imagine Sathoshi to be a bit of a hermit.

In that sense, even getting a Nobel price or the Turing Award would make no difference. We won't know who Satoshi is, which means we may get stuck with all kinds of impersonisations of him. Which reminds me of the movie: Being John Malkovich (see trailer here) .

In the movie, people may enter the brain and become John Malkovich for some time, until being spit out and landing at the side of a road. My best guess is that we will witness similar events for those who wish to be Satoshi.

ECBs renewed virtual currencies report: implications for the Third Payment Services Directive

This week the European Central Bank (ECB) revisits the subject of virtual currencies (VCS) in a renewed virtual currencies report with a further analysis. I have read the publication with interest to discover that the previous position on the subject essentially remains the same:
- virtual currencies don't come near money or legal tender concepts,
- the uptake of virtual currencies is still very limited
- the wait and see approach of the ECB will be continued.

The typical paragraph that summarises this approach is:
The usage of VCS for payments remains limited for now, which implies that there is not yet a material risk for any central bank tasks, including promoting the smooth operation of payment systems. However, a major incident with VCS and a subsequent loss of trust in VCS could also undermine users’ confidence in electronic payment instruments, in e-money and/or in specific payment solutions. 

Whereas at first sight the report doesn't lead to a lot of new insights, the broader scope of its definition of virtual currencies does beg a number of fundamental questions with respect to the future regulation of payments. These questions lead me straight into a renewed regulatory approach, to be used in the Third Payment Services Directive.

An improved definition
The major improvement of this Eurosystem-report over the previous one lies in its correction of the definition used for virtual currencies. In an earlier blog I commented that the definition was too vague:
“A virtual currency is a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community”.
With this report, the definition of virtual currencies has formally changed into:
"a digital representation of value, not issued by a central bank, credit institution or e-money institution, which, in some circumstances, can be used as an alternative to money."

I am quite pleased with this change as it allows for a better understanding and classification of the subject of virtual currencies. Interestingly, the elimination of the element of decentralized issuance leads to a far broader range of virtual currencies than previously discussed. And this leads to an interesting follow up question.

Virtual currencies are suddenly everywhere... 
The table below lists the major payment options in the Netherlands, with the virtual currencies listed at the far right. When looking at the turnover figures, one can understand why the Eurosystem will be primarily monitoring the virtual currency scene. The most interesting observation is however that all the blue coloured segments of the table are now also considered to be virtual currencies.

We can see that in particular the giftcard and transport payments (which are out of scope of the payment regulations for a number of reasons) do amount to quite a substantial payments volume. Literally these payments are now also considered to be payments with virtual currencies. And from an analytical perspective, this is a logical consequence.

Regular (e-) payments	OV-Chipcard	Mobile telephone	Retailer Giftcards	Bitcoin / alt-coins
16 million per day	5 million per day (includes loads)	Premium services	500.000 - 1.000.000 per day	Less than 1000 trx per day in NL
€ 903	€ 2 - € 20	€ 2- € 5	€ 12	€ .?
Payment Services Directive (PSD)	Exemption under PSD1	Explicit exemption of PSD1	Out of scope when issued as a single retailer	Out of scope of PSD

Effectively we can now better appreciate today's payments world, seen from the eyes of the consumer. Because the consumer is not bothered by the details of Payment Services Directives and obscure exemptions of mobile payments. The consumer will use the mobile or ticketing payment means as a matter of convenience (or: obligation) and will have to undergo the payment experience as a fact of life.

Particularly in the Netherlands this leads to the interesting situation where a sloppy and easily hackable implementation of NFC is being widely used for public transport payments, alongside a safer NFC implementation of banks that is still working on its nationwide roll-out. Users use them both.

Similarly interesting was the occurrence, last month, of a virtual currencies bank run. As retailer V&D threatened to go out of business, one could witness the sale of its pre-paid gift cards on Marketplace (the Dutch ebay) for considerable discounts. At the same time everyone in the Netherlands dug up and spent their old gift cards, before it was too late.

What the third Payment Services Directive will have to look like 
If we take the wider definition of virtual currencies that the ECB uses, it becomes clear that the user experiences with virtual currencies (and losses: for example the sudden vaporisation of retailer gift card value after a period of 18 months) happen alongside the heavily PSD-regulated instruments and mechanisms.

Based on some prudential rules we now burden some forms of payments with a whole lot of rules, while we neglect all schemes that are out of scope (but may still have relevant consumer effects). This difference is - in my view - too big and requires a changed approach to be used for the Third Payment Service Directive (PSD3).

Under the Third Payment Service Directive, we should recognise that payments can and will be made and offered by everyone to everyone. The PSD3 should thus define a light-weight conduct supervisory framework for all payment mechanisms, regardless of the institutional status of the issuer. Alongside this wide conduct framework, we keep the current prudential framework intact, which outlines the prudential rules applicable to the different institutional payment setups (e-money, payment institution, bank).

The new conduct based framework would apply to payment mechanisms and e-money alike and have as a goal that the user is always properly informed on the basic terms and conditions, redeemability etcetera. The control-mechanisms should not be supervision based, but could be reputation-based for example, allowing the market to monitor and redress, rather than costly supervisors. Only in exceptional circumstances would a European conduct supervisor step in.

In sum: more analysis ahead
The broader scope of the Eurosystems definition of virtual currencies begs a number of fundamental questions with respect to the future regulation of payments. In particular the area of non-regulated payment schemes at the fringes of the PSD might deserve more attention than they do receive right now.

Not only could the question be whether or not a separate regulatory conduct-framework should apply, the European Retail Payments Board might also decide to expend its analysis towards these mechanisms, particularly when they reach a volume/scale which is equivalent to that of the regular payments.

Where and how to look for innovation in payments ?

This week I had the pleasure of joining a panel on retail payments innovation as a part of a seminar by van Doorne and Innopay on the Payment Services Directive and the future changes for the payment industry. Panel chair Gijs Boudewijn challenged me to formulate some thoughts on the future direction of retail payments. I answered that the best place to look would be in places and via perspectives that we could be overlooking right now.

1. Is it access to the account or a traceable id that matters?
There is a lot of discussion on the text of the second Payment Services Directive and on the legal and technical mechanisms that are required to make access to the account work. Due to their origin, these discussions are quite bank centric and the implementation issues surrounding this topic will drain a lot of resources of many players involved.

While being busy with this PSD2 issue, we may overlook the fact that all one really needs is a simple chip-id. In the Netherlands for example, one could use the chip-id of public transport ticket issuer TLS as a basis for use in hip and new proprietary retailer/consumer applications. These would combine the chip-id with an intelligent voucher/billing/customer system that utilises SEPA-direct debits in the back-end. It would provide a smooth customer and retailer experience while the bank only sees regular transactions.

My proposition here is that if we're all looking towards access to the account as the hot spot for innovation, we may be looking in the wrong direction. It might be more about the traceable id.

2. The retailers have landed in an interesting position
In his tomorrows transactions blog Dave Birch referred to an analysis by Peter Jones from PSE on the impact of the interchange fee regulation, published in the Journal for Payments Strategy and Systems. The main conclusion of it was that financially the retailers are the winners by getting a cap on their fees. I agree with that and would be inclined to broaden this perspective.

By tradition banks were the players with the monopoly on payments technology and security knowledge. Even in the 1980s, the collective of retailers in the Netherlands had done a feasibility study to set up their own Point of Sale system. This showed they could set it up for € 5 million euro but they didn't want to take the risk of it failing. So they left it to the banks (to complain about high fees later).

Since that time, the knowledge on processing and payments has become available to a wide range of players, to the extend that banks are now lagging in expertise and capability (while being locked into old technology solutions). The consequence is that retailers will be well able to develop or use in-house apps, customer relation services and payment mechanisms that use the bank infrastructure, without being subject to the rules of the Payment Services Directive.

The main development is therefore that the obliged intermediary role of banks in providing payment mechanisms is gone and will erode. Retailers can regain their customer relationship by themselves or in cooperation with any other ICT-provider that allows them to identify the customer and provide a processing infrastructure. Some interesting innovations can therefore be expected at the outer boundaries of the PSD, as a consequence of the possible exemptions.

I expect both physical and e-retailers to use the non-bank, non-payment space that the PSD defines to achieve exactly what they're after: increased customer retention, increased conversion and a smooth payment experience. Bottom line: we might better be looking outside of the PSD to see innovation in action.

3. On ledgers and tokens
As a final thought I would encourage everyone to try a different mindset for the developments that we are witnessing. Because in essence, anything that happens (in payments/retail) boils down to either tokens (coins, notes, points) or ledgers (private or public). Now let's see what happens if we apply this framework.

We might then appreciate the bitcoin emergence as an innovation in the area of collective ledger provision with distributed trust. We could reposition Linked-In as a privately owned, open and self-administered ledger, that logs individuals achievements that are relevant in the work domain. The same would hold for Facebook and many other e-commerce companies. We would call banks the keepers of the trusted and well protected financial ledgers and would also note that in the public domain, a whole range of ledgers are being interconnected for the sake of security, anti-fraud measures etc.

We could also look at the world of tokens, in its many variations. Tokens of shopping behaviour (saving points), tokens of access (tickets), tokens from government (coins and banknotes), tokens of appreciations (awards, prizes) and tokens that prove identity or personal characteristics. Some of those tokens might be valuable and lead to a change of some of the ledgers, while others would have a role in their own right (voucher for a free coffee).

While it is clear that there are quite a few interesting new developments in the ledger-space, could it be that it is the token-domain where the true action is going to be ?

Payments as an afterthought
In sum: the non-bank, identity-based, non-regulated commercial domain might well be the area where we can see innovations that show us how today's technology can be made to work best so that payments become the afterthought that they are.

Lawsuit in the Netherlands on Bitcoin as 'money' or 'current money'

Since May this year, there is an interesting discussion here in the Netherlands on the legal status of Bitcoin as money.

First law suit on failed bitcoin delivery 
The discussion starts with a law suit of two people engaged in a bitcoin transaction. Party B failed to pay up the whole amount of bitcoins, although it had received all the money for it. Party A, after two weeks partially annulled the agreement (for the part of the bitcoins not delivered). However, this party later on decided to demand to be compensated for the financial loss that resulted due to the increase in price of bitcoins over the course of the year (after the moment of canceling the contract).

Party A based its reasoning on the fact that our law allows for something as 'current money' to be used in order to pay a sum of money. This terminology was explicitly chosen by our legislator (instead of the legal tender concept) to allow non-State forms of money to be condoned in our country in situations where it was commonly used and accepted by all the people.

Should this argument succeed and bitcoins be considered such 'current money' the consequence could have been that an additional compensation claim could be made under our civil law. The judge however outlined that Party A should be compensated for the price rise of Bitcoin between the moment of concluding the contract and of canceling it (some € 1700). No compensation was due however for the remainder of the time, as it was party A that had initiated the canceling of the contract.

In addition the judge outlined that Bitcoins cannot be considered current money that is condoned by the State. Our Ministry of Finance has outlined that it doesn't fit the definition of legal tender, nor that of electronic money and that it should be considered a means of exchange. The nature of bitcoin (tradeable) doesn't work as an argument as also silver and gold are tradeable but not considered to be current money.

New law suit on status of bitcoin as money
A number of players in the Dutch Bitcoin community have chosen to challenge the above verdict of the judge and has raised more than  € 15.000 to pay for expenses of a law suit. It challenges the first verdict in order to have the judge reconsider its position and outline that Bitcoin is money. As a consequence it feels that it must then also be treated as such by our administrative bodies, supervisors, tax authorities etc. This would mean that bitcoin operators could be payment institutions, supervised and exempt from VAT (which, as I understand, are the underlying goals).

While I am very sympathetic to the concept of challenging a status quo and laws, I fail to see how a verdict on civil contract law could spill over into:
- the definitions of payments, money and payment institutions under the Payment Services Directive (and Dutch law),
- the definitions of payments under the Sixth Tax Directive.

Having said that, it will surely be very interesting to see which approach will be taken by the law firm involved and see if they are able to convince the judge that at least in civil contracts bitcoins may act as money.


Last edit: October 1, to outline that it's not the whole Bitcoin community that seek to challenge the verdict.

EBA concerned about anonimity and security for bitcoin

From May 15th until May 17th, the Bitcoin 2014 conference took place in Amsterdam. One of the break-out sessions was dedicated to the topic of Anti-Money Laundering on Transparent Networks. During this session, Dirk Haubrich of the European Banking Authority (EBA) outlined some of the issues and concerns of the EBA with respect to digital currencies and bitcoin.

In his initial statement Haubrich sketched the concerns of the EBA with respect to:
- the use of digital currencies to transfer the proceeds of crime and act as money transmission,
- the fact that anonimity is a burden to link the transactions to persons,
- seizing assets and restoring or undoing criminal or illegitimate transfers,
- the emergence of a hawalla-like new channel via which international transfers may occur to countries that are on the FATF-sanction list,
- the use of those currencies by terrorists and criminals,
- the integrity of creators of digital currencies.

Role of the EBA
As a part of the discussion, mr Haubrich outlined that the EBA has a specific remit in the area of consumer protection and financial innovation. It is from this perspective that the EBA issued its warning on virtual currencies in December 2013. The question whether or not to further regulate virtual currencies is now being investigated by a cross-sectoral working group of European supervisors. This group will publish its outcome in a couple of months.

When asked to discuss the major challenges for digital currencies, he outlined anonimity and it-security as major topics of concern. In combination with the aforementioned list of concerns, the overall impression was one in which further regulation appeared to be more likely than a continuation of the current hands-off approach.

Dutch central bank will strictly supervise banks / payment institutions that deal with virtual currencies (and companies)

Just one hour ago DNB, the Dutch central bank and bank supervisor, issued a warning on bitcoin. It was not the regular warning or disclaimer for consumers, but a warning for the payments industry. Essentially DNB concludes that virtual currencies (bitcoins and altcoins) are viewed as products with a very high risk profile. DNB also announces that it will strictly supervise banks and payment institutions:

DNB will therefore strictly assess the compliance with applicable law (a.o. Wwft and Wft) for those banks and payment institutions that decide to get involved - in whichever way - with virtual currency-companies or that decide to invest in virtual currencies themselves. In 2014, DNB will investigate whether banks and payment institutions are actively involved with new payment products such as virtual currencies and (it) will assess the degree to which these institutions control/manage their integrity risks. The control should include effective measures with respect to client acceptance and the monitoring of new innovative suppliers. 

Guidance considerations
The brief statement of DNB contains some considerations that are the basis for this decision. A first consideration has to do with anonimity. DNB notes that transactions are being recorded in a public transaction ledger. Given that these transactions cannot be matched to physical persons and the virtual currencies are usable as a means of payment, they are an attractive chain of a money laundering process.

The current anonimity in virtual currency systems has consequences for banks and payment institutions. As a result of this anonimity, the buyers and sellers of virtual currencies become indirect relations of the bank. Thise indirect relations can also affect the reputation of the institution which leads to a 'derived' integrity risk. Without having that intention, banks and payment institutions could be facilitating money laundering.
DNB doubts whether banks and payment institutions are able - as a part of their controlled business operations and integrity of policies - to take the appropriate measures for transactions or clients that involve virtual currencies.

A meteorite or a pebble in the virtual currency pond ?
With the statement being just published it is too early to tell whether this is a meteorite that effectively wipes out the virtual currency business in the Netherlands or whether it is merely a pebble that aims to ensure that all virtual currency businesses doing business in the Netherlands ensure full identification and transaction monitoring.

My best guess is that the strong wording is used to stress the urgency and degree of concern that the Dutch bank supervisor has on this matter. So anyone operating in the Dutch environment better take this to heart.