A small light of progress is shining from Andorra, a small European country located 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 involves the creation of a digital currency, or “programmable digital sovereign currency”, that 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 is intended to create an environment in which blockchain technologies and distributed ledgers can be regulated. For Paul (last name not disclosed), CEO of 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 businesses to set up in the country by providing some legal clarifications that will make things easier and more transparent. They see it as a way to attract talent and entrepreneurs to the new economy. »
Note that cryptocurrencies and digital currencies are not legally tendered in Andorra, and the Digital Assets Law does not make any proposals regarding the means of exchange. This privilege is reserved exclusively for the European Central Bank’s preferred currency, the euro. That didn’t stop Paul, a bitcoin enthusiast, from supporting the adoption of bitcoin (BTC) in Andorra:
I’ve been working on this one for a while but finally decided to share it! This is my case for bitcoin adoption in Andorra! https://t.co/xHxl78YChO
— Paul ADW (@PaulADW) July 14, 2022
I’ve been working on this project for a while but finally decided to share it! This is the argument I present for the acceptance of bitcoin in Andorra! https://t.co/xHxl78YChO — Paul ADW (@PaulADW) July 14, 2022.
In a blog post, Paul suggested that Andorra could adopt a bitcoin standard, mine bitcoin with renewable energy, adopt bitcoin as a reserve asset, and welcome bitcoin-centric businesses from around the world.
According to the national newspaper Diari de Andorra, the law on digital assets is a step forward to “make cryptocurrencies an everyday reality”. From a business perspective, Paul said the level of “cryptocurrency friendliness” depends on the business.
“I have a friend who runs a mine here – no problem – and electricity is cheap. If you do financial advice, it’s the same: it’s quite user-friendly and the tax rate is low. If you wanted to run a stock exchange, it could be a bit difficult to find a bank that works with you; the government itself would not be against it. »
During an interview in May, the Andorran Minister of Economy and Business, Jordi Gallardo, mentioned that blockchain was one of the main areas of investment for the small country. It is not clear, however, whether the minister was referring to bitcoin (the world’s first blockchain) or research into the distributed ledger technologies that underpin blockchain.
Josselin Tonnellier, co-founder of StackinSat, told Cointelegraph that there is confusion about cryptocurrencies, blockchain, non-mungible tokens, and bitcoin. StackinSat organizes a major European conference on bitcoin, Bitcoin surfingin Biarritz, France, right next to Andorra, where the group’s headquarters are also located.
Paul, who regularly participates in Surfin’ Bitcoin, confirms that the feeling and confusion in Andorra remains the same: “The regulator does not distinguish between ‘cryptocurrency’ and Bitcoin. They didn’t take the “yet”orange pill“.” Bitcoin is a must refer when a bitcoin newbie begins to understand the principles of the first cryptocurrency.
— Joss Tonn (@Joss_do_it_BTC) June 18, 2022
If you love surfing and bitcoins, we have the perfect event for you: @SurfinBitcoin pic.twitter.com/zGHrhZIie6 — Joss Tonn (@Joss_do_it_BTC) June 18, 2022
Tonnellier pointed out that awareness of digital technologies and currencies is growing, but there is a risk of scams and being lost in the absence of appropriate educational tools or frameworks:
“According to a recent KPMG report, more French are exposed to ‘cryptocurrencies’ than to the stock market […] France is known to be a hotbed of “shitcoinerie””
Although there is no classification table for “shitcoins”, these coins are tokens other than bitcoin, which supporters of the latter coin believe are in danger of falling to zero. The Squid Game Token is one of the most hyped shitcoins of 2021.
Coming back to Andorra, Tonnelier explained that Andorra is the best country to work with technologies like bitcoin. “Andorra is one of the few European countries that does not fall under the jurisdiction of the European Parliament”. In fact, in many ways it could be compared to Switzerland on a smaller scale:
“Andorra is very attractive for entrepreneurs thanks to its low taxation, but Switzerland is very much ahead in promoting the development of activities around Bitcoin and cryptocurrencies in general. This could change in the coming years thanks to this legal text that frames activities around Bitcoin and the blockchain.
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With less than 500 square kilometers of territory, Andorra is one of the smallest countries in Europe. Contrary to popular belief, Andorra is not a tax haven; the microstate abandoned banking secrecy in 2018. However, taxes are much lower than in neighboring countries such as France or Spain, and financial services account for up to 20% of the economy.
Although it is not clear exactly which digital assets the government intends to regulate with the Digital Assets Law, this economic move could help diversify the Andorran economy and welcome blockchain-based businesses and cryptocurrency. For Paul, this is one more step towards bitcoin acceptance in Andorra.