The Dutch central bank, De Nederlandsche Bank (DNB), has issued a warning on digital currencies such as bitcoin, saying that they "are unlikely to become a viable alternative for traditional currency in the foreseeable future".

Recognising that digital currencies fall outside the bank's scope for regulation, the statement on the DNB website warns:

Back in December 2013, the former president of the DNB, Nout Wellink, dismissed bitcoin, saying that the “façade” and hype around the currency would eventually fade – likening it to the 'Tulip Mania' of the 17th century.

In April the deputy director of the Dutch Payments Association, while making the same 'Tulip Mania' comparison, claimed digital currencies were technology but not money.

However, this latest statement is more measured, giving an overview of how digital currencies work, including mining, before warning:

As with many similar bank warnings, the organisation is concerned about the absence of a central authority overseeing the bitcoin industry, with "market players in virtual currency systems [providing] only weak security guarantees".

The security of users' funds are also a threat, the bank says, with the spectre of Mt. Gox’s bankruptcy raised as a case in point:

A further element of the DNB warning is that virtual currencies are still not widely used, due to their disadvantages. Currently, there are less than 1,000 transactions per day in the Netherlands, compared with over 16 million euro payments.

Along with the standard threat of bitcoin's volatility and security problems, the DNB raises doubts about the reliability of the software used in digital currency transactions, saying:

One of the attractions of bitcoin and other cryptocurrencies is that it is extremely cheap to carry out a transaction compared with traditional financial systems, such as international bank transfers.

However, the central bank warns that this will not be the case in the long term and raises the spectre of high fees as bitcoin reaches its built-in production limit:

Jelmer Baukema, a lawyer working at Van Doorne NV, Amsterdam, and who specializes in working with digital currencies, said:

Baukema said that, besides this official statement, there have been a number of unofficial statements from DNB, saying that it exercises, or will exercise, supervision on companies that conduct bitcoin-related activities (such as 'third-party bitcoin services') where, for example, fiat currencies are being held on behalf of third parties.

In addition, he said, the DNB may be planning an official report on bitcoin in the near future.

"In general, this DNB statement on bitcoin is very limited and its contents do not provide new insights on how bitcoin related activities are, or will be, regulated or supervised in the Netherlands," Baukema concluded.

Despite the less-than-positive signals from the Netherlands' banking world, bitcoin is seeing something of a boom in the country, with the Bitcoin 2014 Conference scheduled to take place in Amsterdam next week.

In March, CoinDesk reported how 10 Dutch businesses lining two canal-side streets took the collective decision to band together to accept bitcoin, becoming the country's first 'Bitcoin Boulevard'.

Furthermore, Hollands’ biggest food delivery network now accepts bitcoin, as does one of the country's high-profile lawyers. Dutch bitcoiners can even book a helicopter flight with digital currency, too.

De Nederlandsche Bank image via TonyV3112 / Shutterstock.com