Blockchain technology, which is the backbone to everything crypto and the key to decentralization, has the potential to be implemented in almost every existing industry to enhance security, information sharing, and transparency. Innovators in the tech sector predict its effects will be as far reaching as the development of the internet itself, yet the countries that would seem the obvious choices to embrace and develop the technology, US, UK, Japan, Korea are hindering its progress with regulatory red tape leaving some of the world’s smallest, autonomous regions open to welcome cutting-edge tech companies.
Blockchain Companies Flocking to the World’s Smallest States
City-states with small populations and limited industries see tech companies with major financial backing as a path to future economic growth. While the tech companies get the kind of access to legislators and regulators that would be impossible to reach in countries like the US or Japan.
For instance, the tiny, mountainous micro-state of San Marino has gone into business with Estonian backed Polybius to create a ground-up ecosystem for blockchain innovation. In exchange for the company’s financial investment, the government has given them complete support. Sergio Mottola, executive chairman of San Marino Innovation, was quoted in the BanklessTimes saying,
“The Government of the Republic is willing to take the lead on this transformation and is superbly placed to promote digital innovation through the constitution of a forward-looking legislation and jurisdiction to favor the growing blockchain infrastructure.”
Gibraltar, which already has links to two industries expected to be substantially affected by blockchain, financial services, and online gaming, is well suited for fintech companies to move in. The country is already home to multiple financial institutions familiar with anti-money laundering (AML) and know your customer (KYC) requirements that are becoming de rigor in the cryptocurrency space.
Micro-States Offer Best Incentives to Blockchain Startups
Among this group of ancient states, Malta far and away has opened itself up to companies seeking a safe haven from regulatory restrictions in their home countries. This is in at least partly due to the vision of Prime Minister Dr. Joseph Muscat who is a dedicated believer in the transformative potential of blockchain and cryptocurrency.
Regulatory foot-dragging by countries in Europe and Asia have allowed Malta, and now Jersey, to attract major companies like Binance to set up on their shores where they also enjoy some of the lowest tax rates in the world- around 5%. The Prime Minister expressed his belief in the future of the technology in a speech he delivered in March saying;
“Have any of you ever thought about what gives paper money its value when it’s ultimately just pieces of paper? It is because society attributes value to it. Now some people, who in my opinion are geniuses, are arguing that that value can similarly be attributed to virtual currencies. I have no doubt that it will form the base of a new economy in the future.”
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