A small light of progress shines from Andorra, a small European country sandwiched between France and Spain. The state government, the General Council of Andorra, recently approved the Digital Assets Act, a regulatory framework for digital currencies and blockchain technology.
The verb is divided into two parts. The first concerns the creation of digital money, or “programmable digital sovereign money,” that can be exchanged in a closed system. In fact, this will allow the Andorran country 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 (whose name is withheld), CEO of local Bitcoin firm 21Million, the new law could attract new business. He told Cointelegraph:
“The result they are trying to achieve is to attract new businesses to locate in the country by providing some legal clarifications that will 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 Asset Act does not make any proposals for the means of exchange. This privilege is exclusively for the European Central Bank’s preferred currency, the Euro. That didn’t stop Paul, an avid bitcoiner, from making the case for bitcoin (BTC) adoption in Andorra:
In a blog post, Paul explained that Andorra could embrace the Bitcoin standard, mine Bitcoin with renewable energy, take Bitcoin as a reserve asset, and welcome Bitcoin-focused companies from around the world.
The national newspaper, Diari de Andorra, reports that the Digital Asset Act is a step towards “making cryptocurrency an everyday reality.” From a business perspective, Paul said the level of “crypto-compliance” depends on the activity.
“I have a friend who runs a mining operation here – no problem – and the electricity is cheap. If you offer financial advice, it will be the same: very friendly with a low tax rate. If you want to run an exchange, it can be a bit difficult to find a bank that works with you. The government itself wouldn’t mind.”
In an interview in May, Andorran Minister of Economy and Enterprise Jordi Gallardo stated that blockchain was one of the most important areas of investment in the small country. However, it is not clear if the minister was referring to Bitcoin (the world’s first blockchain) or research into distributed ledger technologies that support blockchains.
There is some confusion regarding Bitcoin, blockchain and crypto in Andorra. Source: Shutterstock
Jocelyn Tonilier, co-founder of StackinSat, told Cointelegraph that there is confusion regarding cryptocurrencies, blockchain, non-fungible tokens, and bitcoin. StackinSat hosts the major European Bitcoin conference, Surfin’ Bitcoin, in Biarritz, France outside of Andorra where the group is also headquartered.
Paul, a regular attendee at Surfin’ Bitcoin, stresses that in Andorra, the feeling and confusion remain the same: “The regulator does not differentiate between ‘crypto’ and Bitcoin. There has not been an ‘orange pill’ yet.” Eating the orange is the bitcoin language when a bitcoin novice begins to understand the basic principles of cryptocurrency.
Tonilier emphasized that awareness of digital currencies and technologies is on the rise, but that there are risks of scams and losses without proper educational tools or frameworks:
“According to a recent report by KPMG, there are more French people who are exposed to “cryptocurrencies” than the stock market […] France is known to be a hotbed of “shitcoinery.”
Although there is no “shitcoin” rating scheme, these coins are tokens other than Bitcoin, which, according to supporters of the latter, is at risk of being relegated to zero. The game token Squid was one of the most popular shitcoins in 2021.
