The governments of several regions that are widely considered to be tax havens have discussed the possibility of stepping into the world of blockchain technology, including through regulation and non-monetary forms of innovation. Others, notably the British territory of Bermuda and the Commonwealth country of Antigua and Barbuda, seem to be keen on reaping other sorts of benefits from the technology and the cryptocurrency built atop it.
A November 23 press release from the Bermuda Business Development Agency (BDA), for instance, announced that the country’s government had launched an initiative “to accelerate the establishment and growth of digital currency business on the island” with the BDA as a partner. This project will take the form of two task forces, the goal of which will be to “advance Bermuda’s regulatory environment as a destination for utility tokens, tokenised securities, cryptocurrencies, and coin offerings.”
Is this simply an innocent attempt to bring more business to the island nation? A cynic might argue that Bermuda’s government is jockeying to position the country as a less-regulated haven for cryptocurrencies once a critical mass of other states’ establishment of more stringent frameworks governing the ownership, use, and trade of digital assets is reached. The press release did refer to forthcoming regulations on “the activities of firms operating in or from Bermuda that use DLT to store or transmit value belonging to others, such as virtual currency exchanges, coins and securitized tokens” but then again, the fact that the nation has tax codes on the books has done little to convince critics that it is not a tax haven. Perhaps tellingly, BDA CEO Ross Webber said of the project, “It’s about innovating based on the strengths of the Bermuda market.”
For Antigua and Barbuda’s part, the country’s Cabinet, after meeting with associates of the Antigua Leisure and Gaming Association, instructed Attorney General Steadroy Benjamin to “draft laws for the implementation of Bitcoin,” according to the publication The Daily Observer. Based on other content in the same article, it appears that this use of the term “Bitcoin” is intended as a gloss for blockchain technology and cryptocurrency. Trade and Consumer Affairs Minister EP Chet Greene said of the development that “this new currency is immutable; you can always go and trace transactions, so in the context of allegations of our country being involved in tax havens, it allows for better traceability.” Whether or not this statement is accurate, it does nothing to address the concern that, in future days of heavy cryptocurrency regulation, the island could act as a haven for foreign-owned digital assets in much the same way that it protects foreign capital from taxation today.
In a joint press release issued on August 8, the country’s government and online gaming mogul Calvin Ayres, who has faced charges over business-related activities, revealed that the billionaire would be advising the state on “the effective implementation of new technological developments in cryptocurrency and Bitcoin.”
“As it did in offshore banking and Internet Gaming in the 1990s,” the memorandum reads, “the government of Antigua and Barbuda anticipates becoming an early leader in the Caribbean to compete in the international community in the provision of a legal platform for world-wide private sector activity utilising blockchain technology.”
With so much innuendo in the air, one might wonder if these small nations are working to become the crypto havens of tomorrow, and, if so, whether they will succeed. Time will tell.