Andorra is taking small steps towards crypto adoption
The micro-state of Andorra is looking to make crypto- and central bank-related movements with digital currency (CBDC) with a bill that could eventually make the country issue its own token – and despite an initial setback, could push for adopting crypto-friendly guidelines in the near future.
The population of the Principality of Andorra is just under 78,000, but it has its own parliament and is technically independent of both Spain and France, the nations it is sandwiched between. And the Andorran government has been busy adopting a number of pro-crypto policies in recent months.
Last year, it took its first steps to regulate crypto operators that have a base in the country. And in April, the ruling Democratic Party of Andorra put forward a proposal to “allow the state to make its own symbol.”
The draft law referred to what the authors called “programmable digital sovereign money” which can “serve as a means of payment” and will be issued by “the central bank or a sovereign government authority.” It will also be “intended for public use,” and may be used to issue government bonds.
The proposal mentions “blockchain technology” and, perhaps more relevantly, it also seems to give private companies permission to launch their own digital tokens – cryptocurrencies in all but names – under certain conditions.
The proposal was put out for public consultation. But last month, the same newspaper reported, the architects pressed the pause button on the plan. Instead of accepting it completely, the politicians decided instead to approve “tokenization” in “closed ecosystems”, such as “ski resorts”. As such, coins could not be traded publicly or listed on stock exchanges – and would have more in common with “Disney Dollars” than with bitcoin (BTC).
The revised bill, now Digital Assets Law, dictates that cryptocurrencies “cannot be [used] as a legal tender in the principality ”and appears to have been heavily diluted at the request of Andorran Financial Authority (AFA), the supreme financial regulator.
The AFA claimed that it “required more resources to be able to perform the necessary checks” on cryptocurrencies.
However, supporters of the bill will be back for a new piece of the cherry. The terms of the law require that the architects return with a “new bill” before a period of 15 months is over.
And this new proposal will include details of the proceeding “issuance of digital assets that can be considered financial instruments.” This apparently opens the door for a cryptocurrency to achieve legal tender status, El Salvador-style.
The media noted that this delay would provide “room for maneuver” for politicians who wanted to keep track of how EU regulators monitor the crypto sector and “thereby be able to follow in their footsteps.”
But some in the private sector would prefer not to wait – and have proposed ambitious plans to follow in the footsteps of other more maverick nations.
A recent proposal from the Andorra-based crypto company 21 million prepared the case for the use of BTC in the principality.
The company noted that using bitcoin may allow Treasury to “open many economic activities”, as it would “allow Andorran banks and businesses to trade outside” banking reporting networks such as FAST. Instead, the parties can “decide transactions on the Bitcoin blockchain, while allowing Andorran businesses and residents to make daily transactions on the Lightning network.”
The company explained that bitcoin would “provide extra resilience to older channels while preserving Andorra’s economic independence.”
The company’s CEO urged politicians to act quickly, explaining:
“By attracting innovative entrepreneurs who want to enjoy a high-quality European lifestyle in a safe environment, the country can climb a few more ranks towards the most prosperous nations on earth, while still having control over the future, and that is great!”
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Learn more:
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– Central Africa rolls out Sango coin in the midst of openness, credibility concerns
– Spanish crypto holders will be “burdened” with new rules for crypto declaration
– French legislator publishes new report to push for crypto legislation
