An overview of legal and regulatory issues for complementary currencies in the Netherlands Introduction
In the Netherlands, a great variety of currencies have been issued. Like all community currency systems, these systems face a variety of legal and compliance issues that need to be addressed in order to operate a sustainable and successful operation. This document looks at six key areas of law: i. ii. iii. iii. iv. v.
Taxation Social Security and Employment Financial Services, Money Laundering and Note Printing Insurance Data Protection and Health and Safety Public Sector acceptance of the complementary currencies
The document will analyse how versions of the four generic currency models outlined below are affected by the relevant legislation. 1. 2. 3. 4.
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LETS Timebank Legal Backed Tender Currency Closed-Loop Payment System
Disclaimer This document only offers an overview of the legal landscape that complementary currencies operate within and nothing contained herein should be considered legal advice. Only the most generic systems are covered. Deviation or hybrid models may alter liability, obligations and compliance issues.
This report has been produced by the New Economics Foundation as part of the Community Currencies in Action (CCIA) collaboration project. CCIA is a transnational partnership project designing, developing and implementing community currencies across northwest Europe. The partnership provides a rigorously tested package of support structures to facilitate the development of currency initiatives across NWE, promoting them as credible policy vehicles. Running from May 2012 to June 2015, CCIA is part-funded through the INTERREG IVB North West Europe Programme, a financial instrument of the European Union’s Cohesion Policy ‒ Investing in Opportunities. Find out more about CCIA on our website:
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www.communitycurrenciesinaction.eu
1. Taxation Tax authorities and regulators may see community currencies as a way in which individuals and companies try to escape the tax implications of their transactions. It is therefore vital that any community currency seeks to mitigate these legitimate concerns by addressing the impact on value added tax (VAT), corporation tax and income tax of all individuals and companies involved. For example, in the Netherlands a ruling has been obtained from the tax authorities that currency earned through social currency schemes will not be taxed as long as it does not exceed the equivalent of €1500, the maximum annual remuneration of volunteers. However, the situation varies among northwest European (NWE) countries, in some of which similar policies are yet to be developed. A further challenge is designing a model which is able to calculate equivalent values in legal tenders for currencies that are circulated on a completely different basis, such as ‘hours’. Nonetheless, an initial assessment is that social currencies (e.g. Timebanking, loyalty schemes etc.), due to their relatively limited scale in terms of individual balances, earnings and spending opportunities, generally carry low risk for users in terms of tax avoidance issues. For professional/business-to-business (B2B) mutual credit and legal backed tender currencies, where the potential risks are higher, measures have already been implemented to verify the identity of participants when they enter the scheme. Dutch tax law is neutral. Every type of income is taxed in the same way. The value of income-in-kind or in complementary currencies will be calculated according to the value in the national currency. The tax service does make a difference between transactions in the informal sector and formal economic transactions. In the informal sector, tax must be paid if the activity concerned meets the following criteria: 1. it is part of economic trade, that is, if the activity manifests itself outside of the home or a hobby. 2. it is engaged in to gain something (intention). 3. it can reasonably be expected to yield a profit (effect). Informal help and care, such as helping friends and neighbours, and voluntary work do not fall under the tax law. However, scale is also a relevant factor: for example, making multiple websites for acquaintances is seen as an economic activity, whereas washing your father’s car once a month is not. The precise legal boundaries are therefore not very clear, with several grey areas. Professional services and firms have to pay income tax and VAT. If a firm is known to the tax authorities, every unit of complementary currency earned will be liable to income tax or VAT. The only exception is when the activity clearly lies outside the normal range1. 1
http://wetten.overheid.nl/BWBR0002672/HoofdstukI/Artikel5/geldigheidsdatum_19-02 -2015, Article 5.3.1 3
1.1 Value added tax (VAT) VAT is taxed over added value in a product or service. The rate is fixed, but differs for different kinds of products and services. Even though VAT is levied on the producer, in most cases it is passed on to the consumer or end user. In the Netherlands, VAT is called “Omzetbelasting” or “Belasting toegevoegde waarde” (BTW). The ‘Wet op de omzetbelasting’ can be found here. . The Dutch VAT system excludes certain categories of services. Among these are youth work, sport, social and cultural activities, childcare, homecare and domestic aid. These exemptions can be read about here and here. Different currency models are also considered differently. -
B2B mutual credit system (TradeQoin,SoNantes):All transactions in TradeQoin and similar currencies are part of the formal economy and thus VAT applicable. Participants are advised to send normal invoices in which they state the applicable VAT rate.
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Legal tender backed system (Lambeth/Brixton pound, SoNantes): Legal backed tender currencies are classed as a face-value credit voucher for tax purposes, since they are sold at face value and redeemed for real goods and services. There is no VAT due on the actual sale of the vouchers, since they are sold at face value, but VAT is due from the businesses that redeem these vouchers. When the vouchers are used/redeemed for goods and services, the value for VAT purposes is the full face value. Businesses that sell such vouchers cannot claim VAT on the sale of the vouchers, because they are sold at face value. The only time that VAT could be charged on the sale of the vouchers is if they were sold for a greater amount than their face value – for instance, if a collector’s pack was sold for a higher rate than the value of the vouchers. This would then be VAT rated. However, in some cases, for instance, if the VAT of the organisation is less than €1.345 per annum, the business does not have to be VAT registered. See here for detials.
To encourage compliance with VAT law, all businesses who accept the vouchers should be notified that normal tax is due on all goods and services they sell for these vouchers. Additionally, any businesses exchanging euros for these vouchers as a service should be informed that they are not able to charge VAT for face-value vouchers. Since VAT must be paid in euros, businesses must earn enough euros (or trade back enough vouchers into euros) to pay for the VAT they owe the tax authorities. Since January 2015, a new ruling on vouchers has been in force: for single-purpose vouchers, VAT is due when the vouchers are issued but not when they are redeemed. For multipurpose vouchers, VAT is due at the moment of redemption. A survey of Dutch regulations concerning VAT with regard to vouchers and value cards can be downloaded here. Also see here for the way in which vouchers are treated under Dutch VAT law. 4
The applicability of VAT legislation to LETS schemes is covered here. - Time bank system (Makkie, Spice): The Makkie is virtually detached from the euro. Nonetheless, in general, services still have to pay VAT. However, the Dutch VAT system excludes certain categories of services. Among these are youth-work organisations, sports organisations, social and cultural organisations, childcare organisations, care services in general and domestic help, as detailed here. The area covered by these exceptions also applies to the sort of services by which people earn Makkies. When the activity does not fall under these categories, VAT should be paid. - Loyalty scheme (E-portemonnee/Limburg.net) Loyalty schemes are usually not related to the euro. Nonetheless, in general, services also have to pay VAT. The Dutch VAT system excludes certain categories of services. Among these are youth work organisations, sport organisations, social and cultural organisations, childcare organisations, care more in general and domestic aid, as detailed here. 1.2 Corporation tax Corporation tax (vennootschapsbelasting) is imposed on the income of Dutch ‘bodies’: that is, on legal persons, not natural persons. The tax rate is slightly progressive, with two rates of 20% and 25% Furthermore, a legal person/body is free from taxation when yearly income does not exceed €15.000 or when the income for the current year and the proceeding four years together does not exceed €75.000. Exceptions of the Corporation tax law (wet op Vennootschapsbelasting) are described here and here. In a business-to-consumer (B2C) program, such as the German Regiogeld, firms have to pay tax on the units of currency earned, because the activities concerned are regarded as economic trade. If businesses can exchange the currency units, tax is levied because such exchanges add to income. Examples of this include the Brixton Pound and the Bristol Pound in the UK and the German Chiemgauer. Regarding Dutch tax law, it is important to consider whether transactions fall under the informal sector or economic trade, as outlined above. In business-to-business (B2B) credit systems, such as TradeQoin and SoNantes,all transactions are considered part of the formal economy and need to be included in companies’ accounts. As corporation tax is calculated on the full profit a company makes, this tax also is payable in euros on TradeQoin transactions. Tax law forB2B networks is straightforward, because the firms concerned all aim for profit. Barter units are taxed in the same way as conventional money. This is usually not problematic, because one barter unit generally equals one unit of the national currency - that is, one SoNantes of TradeQoin is valued the same as one Euro
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Regarding legal tender backed systems, such as the Brixton Pound and SoNantes, Dutch legislation relevant to corporation tax can be read here. Concerning Timebank systems, the Makkie is not considered a legal body under Dutch corporation tax law. In time credit programmes, such as those run by Makkie and Spice, firms do not pay tax on the units earned because they work in the social, rather than the economic, domain. Makkies, and other time credits generally, do not have monetary value for firms. Businesses cannot exchange Makkies with one another. Makkies must be redeemed at specific organisations and, as such, they do not add to the income of the business. The products and services that businesses offer in exchange for Makkies count as gifts under tax law. Loyalty schemes, such as the Belgiane-Portemonnee, are aimed at individuals and not at firms. As such, corporation tax is not involved. See here for details. The applicability of corporation tax to voluntary work is covered here. 1.3 Income tax Income tax is tax on income from business activities, regular wages and income from other activities. Complementary currencies are covered by the regulations regarding ‘income from other activities’. In 1993, the Dutch tax authority added an article covering the tax treatment of LETS, which can be read here (Article 5). The Dutch income tax law,‘Wet op de inkomstenbelasting’, can be read here., and here (Belastingdienst: Loonbelasting wetboek artikel 2.6). Generally speaking, individuals may earn up to €3000-worth of LETS (or other non-convertible currencies) before they have to notify the tax authority. In cases of earnings over €3000, the tax service will assess whether the income falls under economic trade and should thus be subject to taxation. In the above article on the tax treatment of LETS, certain conditions are mentioned, namely: -
The administration should be set up in such a way that balances and turnovers of the members are recorded and accessible when needed by the tax authorities If a member earns more than the equivalent of €3000 of the currency units, the organisation has to inform the tax service.
In contrast to many European countries, the US has no tax exemption for systems like the LETS. This is one of the reasons why this system did not develop in the US as much as in Europe. However, timebank systems do have complete tax exemption in the US, since they are seen as informal help. - B2B mutual credit systems (such as TradeQoin, SoNantes) If a member of staff or owner of a company uses TradeQoin for private expenditure, income tax must be paid. Like all other taxes, this income tax has to be paid in Euros. -
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Legal tender backed systems (Lambeth/Brixton pound, SoNantes)
If the currency scheme is embedded in a government body, this body is responsible for paying income/employment tax on workers’ salaries. If the currency is the main domain of, or embedded in, a private entity/business, then this business should comply with Dutch income tax law. Salaries earned in legal backed tender are considered as income, so income tax is due. However, debate on this issue continues. For further information on Dutch income tax laws and LETS, see here. - Time bank systems (Makkie, Spice) Time bank systems, to which the Makkie largely corresponds, have no direct link with monetary value. Rather, one unit is equal to one hour. Currently, there are no specific regulations on this currency type. However, the tax exemption of €3000 could be applicable as detailed below. The compensation for voluntary work is set at a maximum of €4.50 per hour. This amount may serve as a unit of account. A Time bank member can thus earn 666 units/hours a year, which is equivalent to 55 hours each month or 12 hours each week. However, this does not automatically mean that tax has to be paid when somebody exceeds this limit. The tax authority will assess whether the activities concerned count as informal help or professional service. - Loyalty schemes (e-Portemonnee) Loyalty schemes such as the e-Portemonnee create a form of economic value as reward. As long as this economic value does not exceed €3000/year, the income does not have to be declared to the tax authority. More details here (Article 2.6).
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2. Insurance Insurance is relevant in two ways: first, volunteers engaging in work on behalf of the currency operator may need insurance; and secondly, the governance board should be indemnified against major risks. In some cities/municipalities (for instance, Amsterdam) citizens engaging in voluntary work are covered by a municipal accident/disability insurance policy. There are, however, many municipalities where this not the case. Companies, charities, foundations and other entities (either for-profit or non-profit) which seek to introduce a currency scheme will need to consider the issue of potential liability of governance board members in the case of default, bankruptcy or other eventualities. In some countries (including the Netherlands), insurance products for this type of liability are available, although they exclude liability as a result of, for example, illicit activities. For insurance companies, the risks involved in running a community currency scheme may not be easy to assess, so the appropriate insurance policy may require some negotiation. 2.1 Volunteer insurance (accident/disability) About half of Dutch municipalities have a volunteer insurance scheme via the Dutch Association of Municipalities (Vereniging van Nederlandse Gemeenten, VNG). Under such schemes, volunteers and caregivers have insurance cover for accidents and damage. Volunteers also have liability insurance. Caregivers are not considered volunteers under this policy, so need separate liability insurance. More information is available in the VNG brochure, ‘Vrijwilligerspolis’. Given the above, insurance for volunteers is generally covered by the rules of the municipality that organises their activities. For instance, the city of Amsterdam has an insurance scheme specifically for Amsterdam. See here, here and here for details. - B2B mutual credit systems (such as TradeQoin, SoNantes) TradeQoin is not used to reward volunteers. However, if any organization rewarded volunteers in TradeQoin, the same rules would apply as in the case of time currencies or LETS. Compliancy information available for those currency types should therefore be consulted in any such case. - Legal tender backed systems (Brixton Pound, SoNantes) In general, insurance for volunteers is covered by the rules of the municipality that organises the work. For instance, the city of Amsterdam has an insurance scheme specifically for Amsterdam. See here for details. -
Time bank systems (Makkie, Spice)
The activities in a time bank system are covered by the municipal insurance for volunteers (see above). A question still to be answered, however, is whether participants have to be registered. 8
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Local fiat currency/loyalty scheme (e-Portemonnee)
In the case of loyalty schemes, there are no volunteer workers. Points or credits are earned by individual citizens. As such, any accident related to work in the loyalty scheme is a matter of personal responsibility. 2.2 Liability of board -
B2B mutual credit systems (such as TradeQoin, SoNantes) Legal tender backed systems (Lambeth/Brixton pound, SoNantes) Timebank systems (Makkie, Spice) Loyalty schemes (E-portemonnee/Limburg.net)
Any organisation with a board should be aware of its responsibilities, among which is the liability of board. In general, the liability of a board will play a bigger role when there is more capital involved. Liability of board is addressed in the Dutch Civil Code (Burgerlijk Wetboek). TradeQoin is organized in decentralized communities. Depending on the legal body in which a TradeQoin community organizes itself, specific measures can be taken to decrease potential liability of the board. These measures generally include insurance. Qoin advises the TradeQoin communities to insure the board against liability.For the original law texts and contact details of regulatory authorities relevant tothis subtopic, follow the links here, here and here. .
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3. Labour law The target groups for social currencies, such as people who suffer from disabilities, unemployment and deprivation, are often quite vulnerable. Many of those who can be (re)engaged and who could participate in a social currency scheme are recipients of government/municipal welfare and/or unemployment benefits. For such people to safely participate, it is important to engage in a dialogue with the relevant national and local authorities in order to obtain rulings on the potential impact of participation in social currency schemes. Activities within a community currency scheme such as Time bank can be regarded as voluntary work. When members receive a social benefit, their voluntary work has to comply with labour law. People who receive unemployment benefits (Werkloosheidswet), disability benefits (WAO, WIA, WAJONG) or social benefits can do voluntary work, but have to apply for permission. The definition of voluntary work is: “unpaid and non-obligatory activities within an organisation that has an idealistic goal or pursues a social benefit; such activities usually cover additional contributions to existing civic amenities” (Besluit ontheffing verplichtingen WW and WIA article 1). Voluntary work should meet the following conditions: - The work is in the public interest or in a particular social interest - The work is non-profit - The work does not cost the labour market any jobs and does not replace a paid job. People receiving unemployment benefits may volunteer, but they must report their voluntary work to the UWV, which then assesses whether the voluntary work compromises volunteers' availability for formal work. Social benefits People who are entitled to social benefits have to report to their social benefit organisation. They are legally permitted to earn expense reimbursements, which do not affect the level of the benefit allowance. The maximum expense reimbursement is €764 a year, or €95 in any one month. When the voluntary work increases the opportunity of gaining formal work, up to €1500 may be earned in this manner, with a maximum of €150 in any one month. This is the same amount that anybody, whether receiving benefits or not, can earn in this manner without taxation (Werkloosheidswet, regelingen WWB, Artikel 7h). Disability benefits People who are entitled to disability benefits (WAO, WIA, WAJONG) do not have to report voluntary work to their benefit service. Still, it is advised to do so, to prevent unforeseen problems. People who do voluntary work or work as a caregiver may be exempted from the obligations of social security laws, such as the requirement to apply for jobs, because
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 such voluntary work may enhance their chances of obtaining regular work in the long-run. 3.1 Social security and unemployment and disability benefits - B2B mutual credit systems (such as TradeQoin, SoNantes) and legal tender backed systems (Brixton Pound, SoNantes) In addition to the general information outlined above, activities conducted in B2B systems and legal backed tender systems do not in general involve voluntary work. The organisation that issues the legal backed tender serves as employer and, as such, has to comply with Dutch laws on social security. If people receive income in this type of currency, the income is treated as notional earnings. This can have an impact on any benefits a worker receives. An exception is made for earnings in the form of gifts. In addition, TradeQoin is fully focused on the B2B domain and, as such, do not expect to have any issues with social security law. If they do so, they will follow Dutch jurisdiction on income when on social security. Nor do they not expect to have any issue with unemployment benefits. Should they do so, all income a TradeQoin member earns will be deductible from unemployment benefit or disability benefits. There are numerous social security benefit programs in the Netherlands, each of which is considered differently by the law. All account holders need to comply with the relevant legislation. Most will have to repay benefits when receiving TradeQoin. In this regard, all TradeQoin income will be handled in a similar manner to income in euros. -
Time bank systems (Makkie, Spice)
Timebank systems involve mostly volunteer work. Since the amount of work thus far has remained well under the maximum permitted amount, there will be no effect on social security, unemployment or disability benefits. -
Loyalty schemes (E-portemonnee/Limburg.net)
For loyalty schemes, there is no specific social security consideration. However, the firm that organises the currency is treated as a normal firm and has to comply with Dutch labour law. Since this is an extensive body of legislation and since the organiser of the scheme is a normal firm, we cannot be more specific here. See here for Dutch legislation on social security and here for unemployment law
3.3 Employment Terms 11 Â Â
The B2B mutual credit system (TradeQoin, SoNantes)
As far as we know, in the Netherlands, there are no cases of salaries being paid in B2B currencies. TradeQoin is currently not accessible for employees. However, this could become an option at a later phase, so it is useful to look at relevant regulation in advance. If a member of staff earns TradeQoin for providing professional services, the issuer (employer) is obliged to pay social security charges (income tax, insurance, pension etc.) on the TradeQoin earnings to the tax authorities (in Euros). It is, however, not allowed to force somebody to accept TQ as salary payment, or as a replacement for an existing salary arrangement. Only on voluntary basis or as a complementary form of compensation can TradeQoin be used as a means of paying employees. -
Legal tender backed systems (Lambeth/Brixton pound, SoNantes)
As far as we know, in the Netherlands, there are no cases of salaries being paid in local/legal backed currencies. If a salary is paid in such currencies, it will be treated as normal income. See ‘1.3 Tax: income tax’ above. - Time bank systems (Makkie, Spice) As far as we know, in the Netherlands, there are no cases of salaries being paid in time bank currencies. - Loyalty schemes (e-Portemonnee) There does not seem to be any possibility of salaries being paid in loyalty-scheme currencies in the Netherlands.
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 4. Privacy and safety Data protection is an important topic for most network services. Within CCIA, project partners are be responsible for formulating and implementing privacy policies to protect sensitive user data. The safety protection requirements of individuals are explicated in several legal texts. It is important to understand how these apply to the selected currency types. For example, should operators deal with registered offenders who want to participate in currency programmes? In addition to such questions, there are specific regulations for working with the elderly and with children. 4.1 Safety/Protection of (vulnerable) CC users -
B2B mutual credit systems (TradeQoin, SoNantes)
TradeQoin has developed internal processes to secure the privacy of users and applied ethical standards to avoid misuse of data and harmful consequences of its offered products and services. Since the TradeQoin concept is oriented towards businesses and professionals, it seems unlikely that TradeQoin will ever be responsible for having vulnerable users do work and thus no additional measures in this regard are warranted. -
Legal tender backed currency (such as the Brixton pound)
In the case of children/minors, as well as other vulnerable persons involved with legal backed tender currencies, the normal Dutch laws on economic actions and liability apply. People who work in an organisation and receive legal backed tender currencies in the Netherlands should comply with the regular rules. -
Time bank systems (Makkie, Spice)
In the case of children/minors, as well as other vulnerable persons involved with loyalty schemes, the normal Dutch laws covering economic activity and liability apply. - Local fiat currency/ loyalty schemes (e-Portemonnee) In the case of children/minors, as well as other vulnerable persons that are involved with loyalty schemes, the normal Dutch laws covering economic activities and liability apply. 4.2 Data storage and protection In all cases of data storage and protection, Dutch law on data protection applies, based on the directory no. 95/46/EG of the European Parliament of 23 November 1995. Read more here. ,.
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B2B mutual credit systems (such as TradeQoin, SoNantes) Legal tender backed systems (Lambeth/Brixton pound, SoNantes) Timebank systems (Makkie, Spice) Loyalty schemes (E-portemonnee/Limburg.net)
Thus far, there have been no known cases of misuse of data via liability schemes. Nonetheless, every new initiative should ensure compliance with this law. Regarding Qoin (the organisation which manages the TradeQoin currency), all data kept on members are stored in a highly secure database. All data are owned by the member and cannot be disclosed by Qoin unless the member gives explicit approval. When a member closes his/her TradeQoin account, all information is to be deleted from the database. For integrity reasons, only the email address and transaction history are kept on file.
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5. Financial service regulations Any organisation which prints physical ‘money’ or vouchers, issues electronic monetary units that are convertible into legal tender, or is engaged in the provision of payment services will need to review how the relevant financial services regulations apply to their currencies and which enforcement bodies (such as central banks, national and international finance institutions) are involved in deciding issues of compliance or exemption. All countries have very strict laws regulating who can print money and currency operators will need to ensure that they do not contravene these rules. The provisions of the European Union's Electronic Money Directive (EMD) and Payment Services Directive (PSD) do not apply to currencies that can be shown to operate in a limited network only. But more general rules and laws might apply, for example, for the issuance of paper notes. Banking legislation Every country has its own legislation for issuance of money, be it paper money, coins, or digital money. In the Netherlands, the following rules apply. In general,Dutch law specifies strict regulations when any link exists, be it digital or physical, with the euro. 5.1 Issuing physical currency Paper money and coins: no rules apply, other than that these may not resemble the national currency, the Euro. Anybody can issue paper money and coins, like vouchers or the Makkie. This applies to B2B mutual credit systems, legal tender backed systems, time bank systems (Makkie, Spice) and loyalty schemes. More information is available here in Dutch and English. 5.2 Digital currency non-convertible to national currency The setting up of digital money that is non-convertible to national money is not regulated. When a digital currency is non-convertible to the Euro, anyone may issue it. As such, a complementary currency based on mutual credit (non-convertible to the Euro) is not regulated. Currencies such as barter networks, LETS and time banks all fall under this category. TradeQoin is fully compliant with the Payment Service Directive. According to Article 1 of the Directive, TradeQoin is not classed as money, as the currency is closed-loop and not convertible into Euros. Qoin has a written letter from the DNB (Dutch Central Bank) confirming that the TradeQoin concept is exempt in this regard. Qoin currently is in correspondence with the DNB to obtain a similar letter declaring that TradeQoin is not considered money. A similar initiative in the Netherlands has received such a letter from the DNB. The full Financial Supervision Act (Wet op het financieel toezicht) is available here It
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It defines electronic money as: ‘a monetary value stored on an electronic or magnetic device representing a claim against the issuer that is issued in exchange for received funds to perform payment transactions as referred to in Article 4, point 5, of the Payment Service Directive, and with which payments can be performed to another person than the issuer’. This particular Article is available in full here.
5.3 Digital currency convertible to national currency (if applicable) The issuing of digital money that is convertible to the Euro is regulated. This is the case for all legal tender backed systems. The Financial Supervision Act is rather complex on this subject. We can only give general information, which will not be conclusive for specific cases. Digital convertible complementary money is digital money to which the Financial Supervision Act (Wet financieel toezicht WTF) applies. This law was developed to protect the clients of financial institutions, be they individuals or firms. Digitalisation refers to online money platforms where consumers and firms can exchange their national currency for digital currency. For instance, telephone companies, online gaming, online services like Skype, iTunes and web shops operate platforms of this type. These regulations apply also to complementary currencies whenever currency units can be bought with the national currency. Organisations operating such currencies have to apply for a license to issue digital money and will be considered as ‘institutions for electronic money’. The regulations apply to all transactions with, and expiring dates of, the digital units, as well as to requiring organisation to set up an ethical management body. The full text of the relevant legislation is available here. The Article of the Financial Supervision Act (We op het financieel toezict) which prohibits the issuance of electronic money without a licence from the Dutch National Bank is available in full here. There is, however, one relevant exemption which is described in article 2.10d of the Act. If a currency is rather small – specifically meaning equivalents of a maximum of €5.000.000 in circulation and a maximum of €150 per person - no license is necessary. Read more here. Dutch regulations for electronic money are based on European regulations, which can be read in full here.
5.4 Money laundering
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There are no known cases of money laundering through community currency schemes and the likelihood of this occurring seems limited. Dutch laws and regulations covering money laundering can be found in the Money Laundering Directive (Aanwijzing witwassen op basis van het Wetboek van strafrecht), the relevant sections of which are available here and here. B2B mutual credit systems, time bank systems and loyalty schemes cannot be converted to national currency, so the risk of money laundry is virtually absent in such cases. TradeQoin does, however, have a procedure in place to minimalize the risk of money laundering.When enrolling, a member can register for free and conduct three initial transactions. After the third transaction, a member must formally register. Until then, the member has limited access to TradeQoin’s full set of functions, being unable to draw a credit line or pay at retail, leisure or entertainment providers. After the third transaction, TradeQoin takes the following steps: -
Request and file ID and company registration information with the Chamber of Commerce - During Face to face meetings, check if ID matches person - Research Chamber of Commerce and additional documents if required, to ensure that the individual concerned is indeed authorized to represent the company. - Establish an understanding of the UBO (Ultimate Beneficial Owner) - Establish a proper understanding of the industry sector in which the member is active - Research (via google) if the UBO, company, or any representative of company are high risk, meaning o Risky industries including retailers of jewelry, computers, phones, houses, garages and sellers of second-hand cars. o Risk assessment also involves running background checks for histories of crime, terror, money laundering or PEP (politically Exposed Persons) If any of the above point is flagged, TradeQoin classifies the company or individual as ‘risky’ and initiates a thorough KYC (Know-Your-Customer) process. Ongoing monitoring process: TradeQoin monitors transactions weekly. Transactions that exceed 5000 currency units are investigated to understand the nature of the transaction and the buyer and seller.
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 6. Acceptance of Community Currencies by (local) government Being accepted in lieu of legal tender, particularly by public entities, is the goal of many complementary/community currencies. Municipalities accepting local currencies for both services (swimming pool, public transport etc) and taxes (business rates, local taxes) increases the practical value and credibility of those currencies. However, especially in the Eurozone, those who have tried to establish such spending opportunities in different countries have encountered barriers of a different kind, sometimes of personal nature (risk averseness) and sometimes allegedly due to regional procedure regulations, state law or even EU law. 6.1 Acceptance of Community Currencies for municipal services and taxes The type of currency that would be most suitable for this is a legal backed tender currency. In the Netherlands, no cases are known of municipal services accepting community currencies. ----------------------------------Translation of Dutch laws to English available here.
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