The new regulatory framework could turn Andorra into a hub for cryptocurrency companies from around the world.
The General Council of Andorra, the country's governing body, has Digital Assets Act approved, a legislative framework to regulate cryptocurrencies and blockchain technology.
The regulatory framework is divided into two parts. The first will regulate the creation of digital money and central bank digital currencies (CBDC) and will be called “programmable sovereign digital money,” which can be exchanged within a closed financial system, allowing the country to create its own token.
The second part focuses on Regulate digital assets as financial instruments and aims to develop a secure environment to regulate distributed ledger and blockchain technologies.
In this sense, experts point out that the main objective of this regulatory framework is Attracting investors and major cryptocurrency companies. By offering a transparent, stable and favourable regulatory framework, the aim is to attract both entrepreneurs and companies, reinforcing the country's entry into the new digital and decentralised economy.
On the other hand, it is important to note that this new regulatory framework does not make Bitcoin or other cryptocurrencies legal tender.
El Andorran newspaper has published an article stating that the Digital Assets Law represents a step forward in the implementation of cryptocurrencies in the daily lives of the Andorran population.
On the other hand, this new regulatory framework could benefit Bitcoin miners. Andorra is one of the European countries with the highest cryptocurrency mining activity, due to the fact that energy is affordable. In this way, the new law could favor the mining with renewable energy in the region, which would attract large mining companies.
The main players in the crypto industry in Andorra point out that One of the country's main problems remains ignoranceConcepts such as cryptoassets and Bitcoin are often confused, so it is necessary to educate and ensure that the population and politicians achieve a greater understanding of the sector.
Broadly speaking, Andorra is one of the best positioned countries to become a hub for cryptocurrency companies in Europe, since is outside the jurisdiction of the European Parliament. In fact, the small country is comparable to Switzerland, albeit on a small scale. Although it has renounced banking secrecy, the country has low taxes for companies and entrepreneurs, as well as regulatory frameworks favorable to blockchain and cryptocurrencies.
Jordi Gallardo, Andorra's Minister of Economy and Business, said in May that blockchain would be one of the main areas of investment in the future.
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