A small light of progress shines from Andorra, a small European country nestled between France and Spain. The country’s government, the General Council of Andorra, recently approved the Digital Assets Law, a regulatory framework for digital currencies and blockchain technology.
The law is divided into two parts. The first refers to the creation of digital money, or “sovereign programmable digital money”, which can be exchanged in a closed system. In effect, this would allow the Andorran State to create its own token.
The second half of the law refers to digital assets as financial instruments and aims to create an environment in which blockchain and distributed ledger technologies can be regulated.. For Paul (who did not reveal his last name), CEO of the local Bitcoin company 21Million, the new law could attract new business. He told Cointelegraph:
“The result they are trying to achieve is to attract new companies to settle in the country, offering some legal clarifications that make it easier and more transparent. They see this as a way to attract talent and entrepreneurs to the new economy.”
Note that cryptocurrencies and digital currencies are not legal tender in Andorra, and the Digital Assets Law does not make any proposals regarding the means of exchange. That privilege is reserved exclusively for the preferred currency of the European Central Bank, the euro. This has not stopped Paul, an avid Bitcoiner, from advocating the adoption of Bitcoin (BTC) in Andorra:
I’ve been working on this one for a while but I’ve finally decided to share it! Here’s the case I make for a bitcoin adoption in Andorra! https://t.co/xHxl78YChO
— Paul ADW (@PaulADW) July 14, 2022
I’ve been working on this for a while, but finally decided to share it. This is the point I have for a bitcoin adoption in Andorra!
In a blog post, Paul highlighted that Andorra could adopt a Bitcoin standard, mining Bitcoin with renewable energy, taking Bitcoin as a reserve asset, and welcoming Bitcoin-focused businesses from around the world.
The national newspaper Diari d’Andorra reported that the Digital Assets Law is a step to “make cryptocurrencies an everyday reality.” From a business standpoint, Paul said the level of “crypto friendliness” depends on the activity.
“I have a friend who runs a mining operation here – no problems – and electricity is cheap. If you’re into financial consulting, same thing – pretty friendly and low tax rate. If you want to run an exchange, it can be a bit hard to find a bank that will work with you; the government itself wouldn’t mind.
In an interview in May, The Andorran Minister of Economy and Business, Jordi Gallardo, mentioned that the blockchain was one of the main areas of investment for the small country. However, it is unclear whether the minister was referring to Bitcoin (the world’s largest blockchain) or research into the distributed ledger technologies that underpin blockchains.
Josselin Tonnellier, co-founder of StackinSat, told Cointelegraph that there is confusion around cryptocurrencies, blockchain, non-fungible tokens, and Bitcoin. StackinSat hosts a major European Bitcoin conference, Surfin’ Bitcoin, in Biarritz, France, just outside Andorra, where the group’s headquarters are also located.
Paul, who is a regular attendee at Surfin’ Bitcoin, confirms that in Andorra the sentiment and confusion remain similar: “The regulator doesn’t differentiate between ‘cryptocurrencies’ and Bitcoin. They haven’t been given the ‘orange pill’ yet.” “. Taking the orange pill is Bitcoin lingo for when a Bitcoin newbie starts to understand the principles of the most important cryptocurrency.
If you like surfing and Bitcoin, we have the perfect event for you: @SurfinBitcoin pic.twitter.com/zGHrhZIie6
— Joss Tonn (@Joss_do_it_BTC) June 18, 2022
If you like surfing and Bitcoin, we have the perfect event for you:
Tonnellier highlighted that awareness of digital currencies and technologies is growing, but there is a risk of scams and losses if the right educational tools or frameworks are not in place:
“According to a recent KPMG report, there are more French people exposed to ‘cryptocurrencies’ than to the stock market […] France is known to be a hotbed of ‘shitcoinery’.”
Although there is no classification table for “shitcoins”, these types of coins are tokens other than Bitcoin that, according to the defenders of the latter, are at risk of plummeting. Squid Game Token was one of the most eye-catching shitcoins of 2021.
Back to Andorra, Tonnellier explained that the country is the best placed to function with technologies such as Bitcoin.. “Andorra is one of the few European countries outside the jurisdiction of the European Parliament.” In fact, in many ways it could be comparable to Switzerland on a smaller scale:
“Andorra is very attractive for entrepreneurs thanks to its low taxes, but Switzerland has a great advantage when it comes to promoting the development of activities around Bitcoin and cryptocurrencies in general. This could change in the coming years thanks to this text.” of laws that frames the activities of Bitcoin and blockchain.”
With less than 500 square kilometers of land, Andorra is among the smallest countries in Europe. Contrary to popular belief, Andorra is not a tax haven; the microstate renounced banking secrecy in 2018. Still, taxes are considerably lower than in neighboring France or Spain, while financial services comprise up to 20% of the economy.
While it is unclear what digital assets the government intends to regulate with the Digital Assets Law, the economically motivated move may help diversify the Andorran economy and welcome blockchain and cryptocurrency-based businesses. For Paul, it is one step closer to Andorra adopting Bitcoin.
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