The Principality of Andorra has a population of just under 78,000 people, but it has its own parliament and is technically independent of both Spain and France, and, in recent months, the Andorran government has been eager to implement a number of pro-crypto policies.

A legislative proposal that could eventually see the country issue its token despite an initial setback could push to adopt crypto-friendly policies in the near future - the microstate of the country is looking to make crypto and central bank digital currency (CBDC)-related moves.

It took its first steps last year to regulate crypto operators with a presence in the country. In April, the ruling Democrats for the Andorra party proposed "allowing the state to create its token," according to the news outlet.

The draft law mentioned, "programmable digital sovereign money" that could "serve as a means of payment" and would be issued by the "central bank or a sovereign government authority," as well as being "intended for use by the general public" and could be used to issue government bonds.

The proposal has been made available for public comment. However, according to the same newspaper, its architects put the plan on hold last month. Instead of fully accepting it, politicians decided to allow "tokenization" in "closed ecosystems," such as "ski resorts," which meant coins could not be publicly traded or listed on exchanges and would be more like "Disney Dollars" than bitcoin (BTC).

The revised bill, now known as the Digital Assets Law, states that crypto assets "cannot be used as legal tender in the Principality" and appears to have been heavily watered down at the request of the Andorran Financial Authority (AFA), the country's top financial regulator.

According to the AFA, it "required more resources to carry out the necessary controls" on crypto assets. However, the bill's supporters will return for a second bite at the cherry. The act requires the architects to return with a "new bill" before the 15-month period is up.

The delay will give politicians "leeway" to track how European Union regulators police the crypto sector and "thus be able to follow in their footsteps."

A more recent proposal from the Andorran crypto firm 21 Million made a case for the principality to adopt BTC.

According to the firm, adopting bitcoin could enable the Treasury to "open a lot of economic activities," as it would "allow Andorran banks and businesses to transact outside" bank messaging networks such as SWIFT. Parties could "settle transactions on the Bitcoin blockchain while allowing Andorran businesses and citizens to conduct daily transactions on the Lightning network."

The government of Andorra has officially recognized bitcoin as a legal currency. This decision will allow the country to maintain its financial independence while also taking advantage of any potential benefits of cryptocurrencies, like increased transaction speed or lower fees for transactions made on international exchanges powered by blockchain technology.

Source: https://cryptonews.com/news/andorra-taking-baby-steps-toward-crypto-adoption.htm

Posted 
Jul 27, 2022
 in 
Digital Lifestyle
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