The state of Andorra is looking to make moves related to cryptocurrencies and central bank digital currencies (CBDCs) with a legislative proposal that could eventually see the country issue a token. its own — and despite initial setbacks, could spur adoption of crypto-friendly policies in the near future.
The population of the Principality of Andorra is just under 78,000, but it has its own parliament and is technically independent of both Spain and France, the countries it straddles. And the Andorran government has taken an interest in adopting a number of pro-crypto policies in recent months.
Last year, it made its first moves to regulate crypto miners with bases in the country. And in April, according to news agency Diari Andorra, the ruling Democrat for the Andorra party put forward a proposal to “allow the state to create its own token.”
The draft law mentioned what its authors called a “programmable digital currency” that could “serve as a means of payment” and would be issued by a “central bank”. or sovereign government agency.” It would also be “for public use” and could be used to conduct government bond issues.
The proposal refers to “blockchain technology” and, perhaps more appropriately, would also grant private businesses the right to launch their own digital tokens – cryptocurrencies, minus the name – in certain conditions.
Proposals were made for community consultation. But last month, the same newspaper reported, their architects hit the pause button on the plan. Instead of adopting it outright, politicians decided to approve “tokenization” in “closed ecosystems”, such as “ski resorts”. As a result, the coin cannot be traded or publicly listed on exchanges – and will have more in common with the “Disney Dollar” than it does with bitcoin (BTC).
The revised bill, now the Digital Assets Law, states that cryptocurrencies “cannot [be used] as a legal tender in the Principality,” and appears to have been heavily diluted. at the request of the Andorran Financial Authority (AFA), the leading financial regulator in the department.
The AFA states that it “requires more resources to be able to exercise the necessary controls” on cryptocurrencies.
However, supporters of the bill will return for a second slice of cherries. The provisions of the act require architects to return with a “new bill” before the 15-month period ends.
And this new proposal will include details on the prorated “issue of digital assets that can be considered financial instruments.” This seems to open the door for a cryptocurrency to gain legal tender status, El Salvador-style.
The media commented that this delay will create “room to maneuver” for politicians who want to keep an eye on how European Union regulators oversee the crypto sector, and “ so they can track their footsteps.”
But some in the private sector won’t want to wait – and have proposed ambitious-sounding plans to follow other larger nations.
A more recent proposal from Andorra-based cryptocurrency firm 21 Million made the case for BTC adoption in the principality.
The company commented that the adoption of bitcoin could allow the Treasury to “open up a lot of economic activity”, as it would “allow Andorran banks and businesses to transact outside of” bank messaging networks like SWIFT. Instead, parties could “settle transactions on the Bitcoin blockchain, while allowing Andorran businesses and citizens to conduct day-to-day transactions on the Lightning network.”
The company explained that bitcoin will “provide additional resilience to legacy channels while maintaining Andorra’s financial independence.”
The company’s CEO urged politicians to act quickly, explaining:
“By attracting innovative entrepreneurs who want to enjoy the high-quality European lifestyle in a safe environment, this country can rise several ranks to become the most prosperous countries on earth. , while still being in control of my future and that’s amazing!“