European Countries Need Bitcoins – Crypto
This is Holly Young, Ph.D., an active builder and opinion editor in the Portuguese Bitcoin community.
Disclaimer: BTC Inc. is the parent company of the Bitcoin Conference.
It was a real joy to watch Katie Ananina and Jessica Hodlr take the stage at the Bitcoin Amsterdam conference (not least because minutes earlier a journalist from the Financial Times had just expressed his disdain for the absence of women at the conference). They have done a great job of articulating how states should see their citizens, especially us bitcoiners.
Jurisdictional arbitrage is a concept that is very relevant to the Bitcoin community. At the risk of being called arrogant, I’d like to take a moment to detail why every country should not only want, but encourage us to approach them.
Sure, bitcoin is f*ck money. It gives a one-fingered salute to the state in its most invasive, inappropriate form—the meddling state, the nanny state, the state that wants to take away your freedom and dictate the rules by which you and your family live. But there is a central contradiction here. Despite what the legacy media claims about Bitcoin (and, by extension, Bitcoiners), we’re not all gun-toting psychopaths, terrorists, or drug lords—in fact, from what we’ve seen, Bitcoiners are pretty solid people.
In general, the Bitcoiners I’ve met are socially engaged, family-oriented, and community-minded. They are intelligent, at the forefront of technical, financial and social innovation. They are rich, curious and idealistic in the best possible sense – ready to commit themselves to building a better world. They want to invest in the future and build businesses; In general, I would go so far as to bet that a Bitcoiner contributes more to their community than the average member of the public, whether through investment, innovation, or general social engagement. This is of course cumulative – communities build neighborhoods, neighborhoods build counties, and counties build countries.
“What jurisdiction wouldn’t want to host such a community,” you may ask? As Katie and Jessica point out, jurisdictions must compete positively to attract new citizens of this caliber.
As we all unfortunately know, not all jurisdictions see it this way. The United States has fired various warning shots at Bitcoin citizens, including threats to impose taxes on unrecognized capital gains. There are several examples of developing countries that strongly see potential Bitcoin offerings — including the darling of the Bitcoin community, El Salvador — but none has yet emerged as a forerunner. Even El Salvador’s best efforts seem to be, at least temporarily, somewhat bogged down by issues of acceptance and implementation.
Europe is desperate for Bitcoin. We recently saw him threaten to ban mining. As most of you are well aware by now, banning mining in any jurisdiction won’t actually kill Bitcoin, as lawmakers believe – instead, it will flood the miners (and with them power, wealth, and a thriving community). friendlier jurisdictions. We first saw this on a large scale in 2017, when China banned bitcoin mining – benefiting the US, where most of the mining migrated. Mining bans and tax laws seem to be paired with unholy allegiances when it comes to a state’s attitude toward Bitcoin — and the consequences for that state. Ban mining and tax the sale of bitcoin and watch other jurisdictions benefit from the influx of bitcoin migrants.
The fact is that Europe has a large and growing Bitcoin population and we are looking for a home.
A number of European countries have undoubtedly shown their colors in recent years. For example, the Netherlands, once a golden land of opportunities based on trade and healthy commerce, decided to make Bitcoin net negative, implementing strict regulations on Bitcoin companies and a 30% capital gains tax on Bitcoin assets. Predictably, Dutch Bitcoiners and Bitcoin companies voted with their feet, leaving the Netherlands for jurisdictions with better legislation. Perhaps the Netherlands is congratulating itself on its purge of bitcoiners – however, anyone with half a working brain can see that this is actually brain drain deluxe, causing the young innovators and money holders of the future to emigrate.
It is clear that the traditional European financial powers are less suited to stay on the throne when it comes to Bitcoin. Switzerland, with its long tradition of respect for finance and discretion over identity and resources, seems too stuck in the tracks of its legacy financial system to be a real contender for the role. Brexit may have freed the UK from the quagmire of EU legislation, and London may have a solid name as a financial centre, but the shelf life of individual political leaders is now less than that of a pot of yoghurt and a falling national. foreign exchange, it would indeed be a foolish company to build its foundations there now.
Portugal was by no means known as a financial center, but in a previous article I detailed how fertile ground it is for the establishment of Bitcoin communities. Due to the relative ease of visa procedures and the policy of no capital gains tax on bitcoin, bitcoiners of all nationalities have flocked here, and those of us who regularly hold meetings have seen our numbers swell very reassuringly.
However, Portugal faces a fork in the road. It is one of the EU’s poorest cousins and in recent years has been heavily dependent on EU grants for various aspects of its capacity building. The euro has brought even more tourism, a sector on which Portugal depends heavily to swell its coffers. If the EU were to crack down on Bitcoin in any broad sense, it would be a big ask of Portugal to stand up for its Bitcoin communities.
And then there is the dazzlingly ripe fruit of the capital gains tax. Last week, Portugal proposed a new law to impose a capital gains tax on bitcoin, albeit in a nuanced form: bitcoin held for more than a year will remain tax-free.
This could be interpreted in several ways. Of course, the cynic might say that this is the thin end of the wedge – the first bite into the juicy bitcoin savings of bitcoiners drawn here, which could turn out to be a classic bait and switch. maneuver. Others argue that this regime rewards HODLs for HODLs: a tax system, to be sure, but a lenient one.
Of course, if Portugal decided to impose a capital gains tax on bitcoin that would penalize those who immigrated because of the favorable taxes currently offered, the effect would be very simple. The national coffers would not swell from any such tax decision. Instead, the nascent Bitcoin communities that thrive and take root here would simply disappear, melt away, as we European Bitcoiners pack our bags once again and head off in search of the next Bitcoin haven.
There seems to be a huge opportunity for European countries at this point, which Portugal is uniquely poised to seize, having been the immigration destination of choice for both European and American bitcoiners seeking to escape the draconian for the past few years. and colder) jurisdictions. If Portugal decides to be a safe haven for bitcoiners, more and more of us will come here, enriching the economy with investment and innovation, and contributing our skills and commitment to the continued growth of the country. At Bitcoin 2022, Madeira, a Portuguese island, announced its support for Bitcoin, welcoming Bitcoin communities and businesses. Will mainland Portugal follow suit?
If we look at jurisdictional arbitration from the perspective of the rich and innovative community of bitcoiners, countries should line up to advertise their merits to us.
So, what about Portugal? Where to, western land?
We European bitcoiners are waiting and watching the various political waves.
This is a guest post by Holly Young. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or the Crypto.