Andorra, a successful country for decades, was clearly affected by the global financial crisis of 2007, similarly to its neighboring countries. The Principality had to react, and, without a doubt, it did. Beyond the differential homologation process, fully implemented, in 2012 it made a clear commitment to the variegation of its economy through the liberalization of foreign investment. Aligning with this idea, the definition of the Andorra Brand and the process of its development will focus on strengthening traditional economic sectors but achieving diversification through the attraction of foreign investment and talent. Precisely, the attraction of international talent and the empowerment of the national one has been a constant for years. In Andorra, we were given the ideal circumstances for its development, especially in the field of technological innovation and very particularly in the digital world.
And here is how Andorra has unquestionably committed to become a pioneer in this sector, developing the world of digital assets, through Law 24/2022 of June 30 and promoting legislative changes to create an ecosystem adapted to the goals set through Law 42/2022 approved on 1st of December on the digital economy, entrepreneurship, and innovation.
The popularity of blockchain technology, however, has found its maximum exponent with the appearance of “cryptocurrency”. Here we talk about a mysterious Satoshi Nakamoto, who´s personality remains hidden from everyone. It is still unclear if he is even a real person or a group of people, but who, as it is said, in 2008 created the whitepaper of a digital currency, Bitcoin, an algorithm which allowed a community, alternative to the systems of central banks, to emergence, among them the ECB or the American Federal Reserve, developing a whole alternative monetary system that has then been replicated in multiple currencies based on the same technology. Directly related to digital currency, I’m sure everyone has heard of “mining”, usually in a pejorative sense.
On the contrary, precisely the “miners” through certain hardware and software act as validators of operations and depending on the effectiveness of their intervention, the system rewards them with currency that is introduced to the market. It is what is known as a “proof of work”. Subsequently, one of the most recognized currencies, Etherium, has evolved in search of greater security for the cryptocurrency investor by trading remunerated deposits in “exchanges” (financial institutions specialized in the conversion of this type of currency) where it is known as “proof of stake”. This system is more stable, but more conservative, although recently there are options that allow the free availability of named actives.
Another digital asset is the “token”, an asset of restricted validity. Its essence is easier to understand with examples from our day-to-day life, such as the physical chips of a casino, the digital currencies of video games. Even if we speak of tokens as an asset of restricted scope, the applied technology is blockchain, which gives it maximum security. Thus, we find fungible, collateralized tokens, which existence and value fixed in a specific physical asset, such as a token on a real estate asset. But there are also non-fungible tokens, NFTs, everyone has heard of. Non-Fungible Tokens are, in some cases, unique and original digital creations that have become famous by trading on the www.opensea.io platform.
One of the proving elements of Andorra’s commitment to the development of the digital world is an event dedicated to blockchain and big data, taking place in the Principality. The “Summit Art & Innovation” which will be held on February 23, 24 and 25, 2023 with the institutional collaboration of the Government of Andorra and representatives of Andorra Business and which surely is an opportunity to get to know this world better. The world that is widen by the whole world of metaverse, art and digital, luxury and lifestyle design, all linked to this increasingly developing digital world that Andorra has fully committed to.
There is no doubt that building a reputation as a friendly jurisdiction in the field of digital assets will help us compete with other states that have been working in this area for a few years by now, such as Liechtenstein or Estonia. There is a distinguishable factor that, with all due respect to our competitors, makes us unique. It is a quality of life and safe environment that Andorra offers, as well as our location, just two hours from the great Barcelona and the Mediterranean Sea. I invite the entire international digital nomad community to discover, at least for these reasons, the exciting country called the Principality of Andorra!
By Pere Augé, CEO and Founding Partner of Augé Holding Group
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