Cryptopas: Convenience or Danger? The Role of Payment Giants in Crypto Regulation

The crypto pass seems like the ideal solution to a well-known obstacle in the crypto world: the limited options for paying with cryptocurrency in everyday life. The crypto pass allows users to load cryptocurrency onto the pass, which is then converted into euros.

This process allows merchants to receive money instantly, making these cards – which function like regular bank cards – convenient for everyday use. Thanks to their connection to the payment networks of View and Mastercard are accepted almost everywhere.

The downside of convenience

However, this convenience also has a clear downside. The companies that issue these cards are often located abroad, from the United States to the Seychelles. This puts them outside the reach of Dutch regulators such as the Dutch Central Bank. Bank and the Netherlands Authority for the Financial Markets.

This fragmented control creates vulnerabilities. Joras Ferwerda, a professor of money laundering, explains to NOS that anti-money laundering measures vary from country to country. "The strength of a transaction control is only as strong as its weakest link," he notes.

What makes these cards particularly attractive to criminals is that some foreign providers only minimally check the identity of their customers, making transactions under a false name difficult to trace.

The responsibility of payment giants

Experts are partially blaming the payment giants. "Visa and Mastercard should take responsibility," senior lecturer in cybercrime Rolf van Wegberg told NOS. He emphasizes that cryptocurrencies have long played a significant role in crime, including extortion and money laundering.

"We have enormous confidence in cards labeled Visa or Mastercard," adds Ferwerda. "Therefore, it makes perfect sense to demand additional responsibility from them."

Frequently Asked Questions

Why is the crypto pass seen as a potential threat?
The crypto card can pose a threat because issuing companies are often located abroad, beyond the reach of Dutch regulators. Moreover, some providers only minimally verify their customers' identities, making transactions under a false name difficult to trace.

What roles do experts think Visa and Mastercard should play in this matter?
Experts believe Visa and Mastercard should take responsibility, given the significant role cryptocurrencies play in crime.

What does Joras Ferwerda mean by “the power of a transaction control is only as strong as its weakest link”?
With this statement, Ferwerda means that the effectiveness of transaction controls depends on the weakest link in that control. If one country or agency doesn't have its controls in order, this can undermine the effectiveness of the entire control chain.