A politician from Curacao, Michelangelo Martines has revealed his aims to leverage blockchain technology and cryptocurrencies to make the small Caribbean island a hot spot for the emerging financial technology.

Financial Prowess

Martines is a member of the Curacao Parliament, from the leading KEM party. With his plans, the politician wants to turn the small Dutch island into a crypto powerhouse, creating a friendly economic zone where people and companies from all over the world can do crypto trading and keep their holdings.

The island mostly relies on its tourism and its financial strength is a means of income. The island’s finance industry’s history is long, dating farther back than even World War 1. Before that, the island’s powerful merchants used their finance departments to give out informal loans to the community. At the turn of the last century, rapid industrialization and modernization saw the island government set up proper financial institutions.

Today Curacao is considered a tax haven, even though it has a strict compliance of AML and other financial laws governed by the EU.

This taxation relaxation is exactly what Martines intends to exploit and drive up crypto usage.

Crypto Haven

Blockchain and crypto are perfect examples of how the tax relaxed policies of Curacao and the uncensored digital currencies gel together.

The rise of cryptocurrency values in the past few years has made it a prime investment vehicle for people all over the world, including the recent mainstream interest that has driven value higher than ever. The many folds increase in prices, outstripping even gold, comes with its own set of problems: tax on gains.

The huge amount of taxes to be paid to governments is seen as a hindrance as the huge amount of money to be paid eats into the profits. Curacao, already is a tax haven that has a very low percentage and this places it in the perfect position to make it a hub for everything crypto.

Having offshore agreements and arrangements means that investors, traders and firms can register with Curacao government and declare their crypto holdings from there. Legally, the digital assets will belong to the registered entities in Curacao and thus the parent firms would not be liable to pay taxes to their home countries.

Another factor that comes into play is the legality of cryptos themselves. Countries around the world have a different stance on these, with some accepting them as currencies, some declaring these assets as properties with many out rightly banning and declaring these illegal. The varied stances also makes it difficult for firms and companies to do business across borders without getting stuck in a legal quagmire.

Apart from the regulatory confusion, banks and other financial institutions have mostly been cold towards cryptos. Primarily seeing these as unregulated assets and a threat to the existence of fiat, traditional financial institutions mostly shy away, with many being uncooperative and not willing to provide support services.

Not the Only Haven

Parliamentarian Maritnes is not the only politician in the world who sees the potential of using crypto to make their jurisdiction a hub of global activity. A Japanese assemblyman from Tokyo has revealed his intention of making the capital a global financial hub that is run by cryptocurrencies, not fiat.

Yuu Ito, a Tokyo Metropolitan Assemblyman who is successfully running his third straight term for the city, said that it is time that the Japanese Capital should be boosted in terms of crypto utilization and adoption to a level where it is at par with other large cities such as Hong Kong or London.

He declared his intention to do such that are in line with the Yuriko Koike, the Governor of Tokyo who has already declared her intentions of pushing Tokyo’s financial standing in the world. Yuu said that drastic steps need to be taken as the crypto economy in Japan has faltered and that means other international cities like Macau and Hong Kong have left Tokyo in the dust.

The intention, though noble and a step to bring back Japan as a financial power, is far from easy. Though Japan is a relatively crypto friendly nation, the high taxes associated with the digital assets have seen Bitcoin and other crypto adoption ratios at their lowest in the last three years. The Assemblyman has said that to aid adoption and use, Tokyo Metropolitan government will need to revaluate the taxes. But this will be only the first part of the step as it can have broadereffects on the rest of the national jurisdictions and this just might become a national issue.

And it is not just about the future. The Japanese have said that it can be used even today, with the immutable records helping to keep tabs on economic aid being distributed on a mass scale to the public under the current COVID-19 financial aid as an example.

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