Governor Unveils ‘Puerto Crypto’ Plan to Transform U.S. Territory into Blockchain Safe Haven
Hassled and hectored by regulators from Hong Kong to Shanghai, blockchain technology and crypto-currency developers may have found a surprising safe haven – Puerto Rico. On Friday, Gov. Ricardo Rossello told a cable TV show that as part of the rebuilding plan for the U.S. territory, devastated by Hurricane Maria last fall, he planned to reduce state regulation and create an economic development zone for new technologists, which he called, “Crypto-Rico.”
The Puerto Rico Department of Economic Development and the governor’s office are partnering with a conference taking place next month there, off the U.S. mainland, and will unveil further details of the nascent plans.
The Rossello administration is planning new economic policies that “take advantage of the blockchain component of it because it has transformative and disruptive components for business and for government,” the governor said.
The island is already luring crypto entrepreneurs and investors due to exemptions found in the Internal Revenue Code, called Act 22, which allows nonresidents of Puerto Rico to pay no taxes on their long-term capital gains.
To further attract entrepreneurs, fleeing the regulatory lock-down in China and other places where blockchain and crypto-currencies have flourished, the governor proposes further changes to regulations and some new local laws.
“So, in my view, there is still a lot of work to be done and giving clarity that this is not used for money laundering or it’s not used for other areas,” said Rossello, during the TV interview. The governor is a member of the far-left New Progressive Party, who was trained as a scientist and who spent most of his career in the mainland U.S. “Cryptocurrency is sort of an application of that — I am concerned with some of the reports that have been going on there on how this is being used,” he added.
Rossello is slated to speak at an event next month to promote these early stage blockchain and crypto-currency proposals. Puerto Rico is the “friendliest locale in the United States for entrepreneurs, investors and service providers in the crypto-currency and blockchain arena,” according to the governor.
The 2½-day conference, dubbed ‘Puerto Crypto,’ is being run in partnership with the Puerto Rico Department of Economic Development and the Governor’s executive office.
Entrepreneurs, Analysts Enthused
Technology entrepreneurs and industry analysts were enthused by the report of the governor’s plans, and are awaiting clarification.
“Given ‘software developer’ is the number one paying job in the world and ‘crypto’ known as public blockchain software is the fast growing software type, there are plenty of jurisdictions whose executives understand the economic value of having a jurisdiction friendly to cryptocurrency and public blockchain development,” Anthem Blanchard, CEO of Anthem Vault, the world’s largest retailer in the bitplay space, in an exclusive interview with Block News, a C/NET digital publication. “Any crackdown efforts on cryptocurrencies by overseas jurisdictions has proven futile as crypto organizations tend to be de-centrally organized and operated. Thus crypto organizations are easy to move to friendly jurisdictions and this has proven to be the case several times.”
The policy moves come as China’s Central Bank tightens its clampdown oncryptocurrency trading there, probing online platforms and mobile apps that offer exchange-like services. Authorities bannedcryptocurrency exchanges last year there, causing fluctuations in the markets for Bitcoin and other crypto-currencies, and impacting blockchain technologists’ plans too.
Other jurisdictions are looking to lure crypto-currency and blockchain technology perveyors, but are struggling to do so. Authorities in Quebec noted the increase in ‘bigcoin drilling rigs’ there recently, but said they did not have the electricity generating capacity needed to keep up the with power demands caused by all of the new parallel processing computer operations emerging in the French-speaking, Canadian province.
Will the policy moves to attract crypto-currency and blockchain providers to Puerto Rico cause a rift with the federal government for the island’s policymakers. Not yet, at least. The SEC said it lacks the regulatory authority to govern crypto-currency transactions.