CoinAgenda Caribbean returns to Puerto Rico for its 3rd year

SAN JUAN – CoinAgenda, the global conference series for connecting blockchain and cryptocurrency investors with startups, was holding its third annual CoinAgenda Caribbean event this weekend at the InterContinental San Juan.

Besides the conference’s keynotes, panels, presentations, Startup Contest and networking events, industry leaders were focusing on blockchain economic development in Puerto Rico and other Caribbean jurisdictions, the rise of security tokens, enterprise applications, changes in the digital currency funding vehicles and digital currency exchanges.

“The Caribbean region has been a world leader in funding blockchain entities due to its innovative financial structures, and Puerto Rico has attracted more than 300,” said Michael Terpin, CEO and founder of CoinAgenda. “We’re excited to bring CoinAgenda Caribbean to Puerto Rico for its third year, and look forward to gathering some of the industry’s best and brightest minds to explore what’s next for cryptocurrency investing in 2019 and beyond.”

The conference will feature more than 40 speakers and 20 company presentations, including renowned author and economist Harry Dent; Alphabit Fund managing partner Liam Robertson; Tezos security adviser Ryan Lackey; and a panel of Puerto Rico-based blockchain entrepreneurs, including James Greaves (Glyph) and MichaelAngelo Anglero (Keyband).

CoinAgenda Caribbean also includes a startup competition “highlighting top entrepreneurs developing real-world use cases for blockchain technology,” a release explained, adding that “Founders interested in pitching their projects (including security token offerings) are invited to apply here.”

The contest is judged by “prominent token investors, and winners will be awarded a complimentary exhibit at a future CoinAgenda event as well as tickets to partner conferences. Past CoinAgenda startup competition winners have gone on to raise millions in funding, including Aeternity, Bancor, Cashbet, Omega One, SALT Lending, and Qtum,” according to the release.

Watch conference videos here CoinAgenda Youtube.

To learn more, visit caribbean.coinagenda.com or https://coinagenda.com/.

 




Restart Week events begin in Ponce to support redevelopment of Puerto Rico

SAN JUAN – Restart Week, an initiative created by Integro Foundation, DBA Restart Foundation in 2015, with the objective of bringing together people, organizations and resources to help create employment and provide funding for entrepreneurs as part of a broader collaborative effort toward rebuilding Puerto Rico, is holding #RestartWeekSouth in Ponce on Oct. 25-30.

Cryptocurrency entrepreneur Brock Pierce, who hosts the events, hopes to help stimulate the local economy after Hurricane María. The nonprofit was established to support projects that “strengthen the society, regenerate the environment and revitalize the economy of Puerto Rico,” it explains in the announcing release, by connecting angel investors, venture capital firms and startups.

#RestartWeekSouth is the third #RestartWeek event, following #RestartWeekWest events in Mayagüez in May and #RestartWeekNorth in San Juan in March. The series is led by a steering committee comprising individuals representing different organizations and sectors, and is co-produced in alliance with several partners including Genmoji, Universidad de Puerto RicoGente BravaEl Nodo, Museo de la Música Puertorriqueña del Instituto de Cultura Puertorriqueña, LinkPRColmena 66 and LaunchPad.

The activities programmed throughout Ponce are intended to “provide the opportunity to build community, catalyze valuable ideas, efforts, creativity and resources into an action plan that contributes to a cohesive and integrated revitalization plan for the southern region and Puerto Rico,” the organization said.

Among the activities are Restart Foundation’s “Activate Puerto Rico,” a regional series of events to “amplify existing projects and enterprises, introduce and steward the conversation and dialogue of the region’s stakeholders, and set up systems of engagement after the event.”

Activate Puerto Rico includes pecha kucha presentations and interactive panels presenting topics such as energy, housing, land title and trusts, telecommunications, water and tax incentive laws Acts 20 and 22; Community Round Table Discussions & Catalyst Launch; and Round Table Discussions “reflecting on Activate Sessions”; as well as “defining next steps to move forward.”

Activities include Agriculture Day, “to learn and open discussion about the agriculture sector and interconnected sectors such as energy and blockchain”; Ponce Art & Blockchain Day, “featuring a tribute to local architect and designer Maruja Fuentes Viguié with a focus on women’s contribution to Puerto Rico’s rich art history and blockchain’s insertion into this local space”; Tu Camino Empresarial Tour & Demo Day; and Friday night Restart Concert, featuring Los Vigilantes.

Restart Foundation will be contributing a minimum of $15,000 in grants to groups and entities that present “impactful programs that contribute to accelerate growth within the southern region,” the organization said.

“The core of Restart Foundation’s work is based in collaboration. During the past year we have been diligently meeting and joining efforts with local partners to understand and assess real needs and opportunities, as well as building relationships with global organizations so that together, we may have the most impact. This collaborative effort has assisted us in the development of integral short and long-term goals and strategies aligned to programs and projects that attend to real needs and would bring the most value. We have developed important bridges across the island and we look forward to building many more in the southern region with #RestartWeekSouth. We invite and encourage all individuals and organizations to join us and participate in the wide diversity of events scheduled for the week,” expressed Adam Krim, program director of Restart Foundation.

“Intellectual capital is a terrible thing to waste. Sadly, much of it has escaped the island. Restart represents not a movement, but an opportunity to create the models to be replicated around the world, right here in Puerto Rico. And with that comes great responsibility, to make those models inclusive, and to ensure the through them the wellbeing of generations to come,” said Francisco Laboy, chief strategy officer at Genmoji.

Restart Foundation’s initiatives include a $50,000 donation to the University Start-Up and Innovation Factory space at the University of Puerto Rico in Mayagüez; a Hackathon in Mayagüez with over $12,000 in scholarships, cash prizes and cryptocurrency; an art auction that provided the funds to bring solar power and refrigerators to six homes through the volunteer organization Off Grid Relief; and a donation in collaboration with Southwest Airlines that facilitated travel for 30 volunteers of the R.E.L.I.E.F. Foundation to work in different communities and supported the creation of a telemedicine facility that serviced over 120 patients with limited access to medical care after Hurricane María.

Registration for the events ranges from free to suggested donations starting at $3 for locals to $250 and up for new residents and visitors. Scholarships are available for local participants as well.

For registration and schedule of events, visit www.restartweek.org. For additional information and support, write to restartweek@gmail.com.




Puerto Rico: the Caribbean paradise for techno and cryptocurrencies?

Editor’s note: The following article originally appeared in the March 22-28 print edition of Caribbean Business.

SAN JUAN — Following the devastation left by hurricanes Irma and Maria, many individuals and businesses want to make Puerto Rico the Caribbean paradise for technological and cryptocurrencies to aid in the island’s recovery.

While blockchain technology companies can be recruited through tax incentives provided by Acts 20 and 22, the question still remains about what would be the regulatory framework for cryptocurrencies.

At the recent Blockchain Unbound conference in San Juan, two sources told Caribbean Business about Blockchain Industries’ plans to create a form of local financial institution to work with cryptocurrency transactions.

(File Photo)

Some individuals questioned the possibility of Puerto Rico becoming a crypto-paradise at all. Government officials noted that as is the norm in jurisdictions regulated by federal laws, Puerto Rico banks cannot use cryptocurrencies and must wait for instructions from their regulators.

Financial Institutions Commissioner George Joyner said he is trying to develop regulations or rulings to determine how to treat cryptocurrencies. He appears inclined to treat them as securities, as is the opinion of the Securities & Exchange Commission, because they constitute an investment in money.

Raúl Vidal, a partner at Omnia Economic Solutions, told Caribbean Business he believes language in Act 273, the International Financial Center Act, is broad enough to allow for the creation of a financial institution dealing with cryptocurrencies. The law aims to expand banking services to turn Puerto Rico into an international financial center.

“When you go through that law, you present a business plan and declare whether or not you will accept cryptocoins. However, it is up to the Financial Institutions commissioner to determine if the law allows it,” he said, adding that he has clients waiting for the commissioner’s regulations.

A lawyer consulted by Caribbean Business was of the opinion that the wording in the Cooperatives Act does not prevent cooperatives, which are regulated locally, from dealing with cryptocurrencies. Cooperatives already are the only financial entities that allow medical cannabis businesses to open accounts with them.

Read the rest of this article in Caribbean Business’ epaper here.




Reports: Puerto Rico-based Noble Bank serving as Tether cryptocurrency reserve

SAN JUAN – An investigation carried out by the Bitcoin Mercantile Exchange suggests that the local financial institution Noble Bank has become a cryptocurrency reserve center and created a relationship with startup Tether and its U.S.-dollar pegged currency, USDT.

The information was reported by cryptocurrency and blockchain news site CCN, and adds to mounting speculation about the possibility that Tether may be launching a cryptocurrency bank on the island.

Puerto Rico may someday have a cryptocurrency bank

On Monday, BitMEX (Bitcoin Mercantile Exchange) Research published a report examining newly released data related to Puerto Rico’s financial system for the calendar year ended 2017.

The data published by the Puerto Rico Financial Institutions Commissioner’s Office indicate that bank deposits by international finance entities (IFE) category jumped by 248 percent to $3.3 billion in the fourth quarter, while total assets for these grew by 161 percent. As BitMEX noted, the surge in deposits correlated with the cryptocurrency market’s dramatic upswell, and Tether’s market cap grew by 215 percent during the same period.

“Cash deposits as a percentage of total assets grew to 85.8 percent from 72.7 percent during the quarter, indicating a growth in full-reserve banking. Full-reserve banking is rare, and there are only two such banks in Puerto Rico that fall under the IFE category,” CCN wrote.

San Juan-based Noble Bank has “verified relationships” with cryptocurrency-related firms. Its founder and CEO, John Betts, has a previous professional relationship with Tether co-founder Brock Pierce.

Stateside media reports have questioned Tether’s solvency. Its creators say each token is backed by $1, and the tokens serve as a proxy for dollars on many cryptocurrency exchanges, but critics have alleged the token is not fully backed and is used to prop up the price of bitcoin.

Coinmarketcap.com says Tether is the second most liquid cryptocurrency, with a volume of $2.83 billion a day.

Blockchain advisory council established by Puerto Rico government

 




Blockchain advisory council established by Puerto Rico government

SAN JUAN – The Puerto Rico government has created an advisory council to foster the development of blockchain businesses on the island.

The move was announced by Economic Development and Commerce Secretary Manuel Laboy Thursday during the Blockchain Unbound conference, held at the Condado Vanderbilt Hotel in San Juan.

Blockchain Unbound is an international conference connecting the island with more than 50 blockchain, cryptocurrency and initial-coin-offering (ICO) stakeholders.

Rivera explained that the council is composed of a mix of public and private sector representatives, including himself, the government’s chief innovation officer, and the Treasury secretary, as well as a mix of entrepreneurs and investors who have moved to Puerto Rico.

Blockchain “is accelerating economic and social changes worldwide and Puerto Rico wants to be a part of it,” Coindesk.com quoted him as saying.

Puerto Rico enters cryptocurrency game

The creation of the council comes after a number of high-profile blockchain and cryptocurrency entrepreneurs followed investor Brock Pierce to Puerto Rico with plans to set up a “city” that would conduct transactions using blockchain and have its own cryptocurrency.

Puerto Rico already uses two local laws, such as Act 22, to attract individual investors to the island with a host of tax incentives.

Rivera said the government was seeking to implement a legal framework to support blockchain businesses.

Meanwhile, George Joyner, the Financial Institutions commissioner, stressed at the conference that local banks must abide by federal law. Currently, local banks are not allowed to deal with virtual currencies.

“We should look for the correct method to address the concerns and meet requirements of regulation. But we have to find a way; this technology will be ubiquitous,” he said.

 




Google bans cryptocurrency advertising, bitcoin price slumps

LONDON – Alphabet Inc’s Google said on Wednesday it was banning advertisements for cryptocurrencies and initial coin offerings, the latest internet company to clamp down on the sector amid growing concerns about scams.

Google’s action, which takes effect in June and follows a similar move by Facebook earlier this year, sent the price of the best-known cryptocurrency, bitcoin, down more than 10 percent to its lowest in a month.

Interest in cryptocurrencies has surged in the last year as their prices rocketed.

That growth has spawned online advertising used by hundreds of companies trying to raise funds by launching new coins or encouraging people to trade the virtual currencies.

Puerto Rico enters cryptocurrency game

“Improving the ads experience across the web, whether that’s removing harmful ads or intrusive ads, will continue to be a top priority for us,” said Scott Spencer, director of sustainable ads at Google, on the company’s official blog, The Keyword.

Under the new policy, Google said it would ban ads for cryptocurrencies and related content such as initial coin offerings, crypto exchanges and cryptocurrency wallets and advertisements providing trading advice.

In January, Facebook Inc said it would ban ads promoting financial products and services tied to cryptocurrencies and initial coin offerings because of the risks to users.

Regulators across the globe have warned consumers about the risks of investing in crypto markets, but internet companies are introducing outright bans because they worry there is not currently sufficient protection for consumers.

“If an entity such as Google does not feel comfortable with exposure to these cryptocurrencies then it is right that they don’t promote it,” said Chris Keshian, chief executive of $APEX Token Fund, which invests in cryptocurrency fund managers.

The CEO of the UK arm of Coinbase, one of the largest bitcoin exchanges, said Google’s decision was a positive development that would not dampen demand, although he viewed the ban as too widespread.

“The Google ban is perhaps too broad as it is. It should be narrowed down” to companies that pitch cryptocurrencies as investments promising a return, Zeeshan Feroz told Reuters.

The price of bitcoin traded on the Luxembourg-based Bitstamp exchange fell almost 10 percent to $8,201, the lowest since Feb. 12. It was last down 8.7 percent at $8,337.51

Other large cryptocurrencies also fell on Wednesday. MVXRP. MVETH.

Bitcoin has lost about 40 percent of its value in 2018 after rocketing more than 1,300 percent last year.

Google also said on Wednesday it would stop ads for financial products like binary options and synonymous products, contracts for difference, rolling spot forex and financial spread betting.

Companies wanting to promote those products would need to be registered with the relevant financial regulators before they could advertise again.

In a separate blog post, Google said it took down 3.2 billion ads that violated its advertising policies in 2017, nearly double the number of ads it removed in 2016.

(Reporting by Tommy Wilkes in LONDON; Additional reporting by Abinaya Vijayaraghavan; Editing by Gopakumar Warrier)




Bitcoin exchange reaches deal with Barclays for UK transactions

LONDON – One of the biggest bitcoin exchanges has struck a rare deal which will allow it to open a bank account with Britain’s Barclays, making it easier for UK customers of the exchange to buy and sell cryptocurrencies, the UK boss of the exchange said on Wednesday.

Large global banks have been reluctant to do business with companies that handle bitcoin and other digital coins because of concerns they are used by criminals to launder money and that regulators will soon crack down on them.

San Francisco-based exchange, Coinbase, said its UK subsidiary was the first to be granted an e-money license by the UK’s financial watchdog, a precursor to getting the banking relationship with Barclays.

The Barclays account will make it easier for British customers. Previously, they had to transfer pounds into euros and go through an Estonian bank.

“Having domestic GBP payments with Barclays reduces the cost, improves the customer experience…and makes the transaction faster,” said Zeeshan Feroz, Coinbase’s UK CEO.

The UK is the largest market for Coinbase in Europe, and the exchange said its customer base in the region was growing at twice the rate of elsewhere.

Feroz said that it took considerable time to get a UK bank on board, partly because Barclays needed to be sure that Coinbase had the right systems in place to prevent money laundering.

Regulators across the globe have warned that cryptocurrencies are used by criminals to launder money, and some exchanges have been shut down.

“It’s a completely brand new industry. There’s a lot of understanding and risk management that’s needed,” Feroz said.

Despite growing interest in both digital currencies and the technology behind them, some big lenders have limited their customers’ ability to buy cryptocurrencies, fearing a plunge in their value will leave customers unable to repay debts.

In February, British banks Lloyds and Virgin Money said they would ban credit card customers from buying cryptocurrencies, following the lead of JP Morgan and Citigroup.

Coinbase said it had also become the first crypto exchange to use Britain’s Faster Payments Scheme, a network used by the traditional financial industry.

(Reporting by Tommy Wilkes and Emma Rumney; Editing by Elaine Hardcastle)

A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken December 8, 2017. REUTERS/Benoit Tessier/Illustration




CoinAgenda digital currency investors’ event to be held in San Juan

SAN JUAN – CoinAgenda, a conference series for connecting blockchain and cryptocurrency investors with startup and initial coin offering (ICO) opportunities, has announced its initial speaker lineup for the second annual CoinAgenda Caribbean, which will take place at La Concha Renaissance Resort in San Juan from March 17 to 19.

According to a release, the three-day conference will focus on “ICOs, digital currency funds, family offices, friendly jurisdictions, investment strategies, and an ICO competition highlighting more than 40 startups and token companies, many of them just prior to their ICO.”

The conference’s organizer, Transform Group, bills the event as an “exclusive, high-end event, featuring meals, parties and a special sit-down dinner at a historic Old San Juan landmark.”

Attendance is limited to 350 attendees, with “Early-bird” registration prices valid until Feb. 28. The organizer says 10% of gross ticket proceeds will benefit hurricane recovery efforts in Puerto Rico.

Last year’s conference in San Juan “marked the US debut of 18 companies and token foundations, including Aeternity, Bancor and Qtum, which went on to raise more than $200 million in their crowdsales and achieve a peak valuation of more than $7 billion,” the release reads.

Puerto Rico enters cryptocurrency game

This year’s speakers include more than a dozen blockchain entrepreneurs who have moved to Puerto Rico in the past two years. Sessions include a “fireside chat” with Brock Pierce, co-founder of Block.One and chairman of the Bitcoin Foundation, “whose recent profile in The New York Times kicked off a wave of new attention for Puerto Rico as a new hub for American citizens looking for a friendly, low-tax (as low as 4 percent to Puerto Rico, no IRS tax) jurisdiction for building new companies, as well as zero tax on capital gains for those qualifying under the Territory’s Act 22 program.”

Another session will feature former Puerto Rico Economic Development Secretary Alberto Bacó, “who first championed the Acts” and founded the Partnership for Modern Puerto Rico (PMPR), and Puerto Rico blockchain tax expert Giovanni Méndez, manager at tax advisory service BDO Puerto Rico.

Other blockchain entrepreneurs who have moved to Puerto Rico will also speak at the event, including “major oil trader turned blockchain entrepreneur Bo Collins, founder and CEO, Renovatio Puerto Rico; Crystal Rose, co-founder and CEO, Sense; Dominik Zynis, co-founder, Wings; Scott Walker, managing director, DNA Fund; Reeve Collins, BlockV, Steve Bassi, founder and CEO, Polyswarm, one of the first blockchain companies to put its operations in Puerto Rico immediately after its token generation; Jim Lowry, cofounder of Storj; and author Harry Dent, who will deliver a keynote speech on how cryptocurrency fits in with the broader macroeconomic forecasts for the world economy.”

CoinAgenda founder Michael Terpin, the “first member of the blockchain community to move from the mainland to Puerto Rico in early 2016, will conduct the fireside chat with Brock Pierce, while Stacy Herbert of the Keiser Report will moderate a panel of prominent new Puerto Rico residents from the blockchain community, as well as have an ‘in the moment’ discussion about the topic with co-host Max Keiser,” according to the published announcement.

The conference’s first day includes “a fireside chat with Gabriel Abed and Oliver Gale, co-founders of Bitt, a Barbados company tasked with bringing digital currencies to the Caribbean region, plus a roundtable session featuring half a dozen Caribbean blockchain leaders, moderated by CoinAgenda content director Enrique Martínez.” There will also be panels on friendly jurisdictions around the world.

Digital currency funds and family offices will be “well represented at the conference, with prominent fund managers Liam Robertson, Alphabit Fund; John Nahm, managing partner, Strong Ventures (Korea); David Siemer, managing partner, Wavemaker Partners (US & Singapore); Miko Matsumara, BitBull Ventures; Richard Titus, general partner, Arcadia Fund; and Timo Lehes, partner, Swarm Fund.”

Other speakers include Halsey Minor, founder and CEO of Live Planet and VideoCoin; Natalia Karayaneva, founder and CEO of Propy; Anthem Blanchard, founder and CEO of Anthem Gold; and Peter Bergstrom, BitBlock Ventures.

For more information, visit www.coinagenda.com.




Crypto ‘noobs’ learn to cope with wild swings in digital coins

NEW YORK – After researching digital currencies for work last year, personal finance writer J.R. Duren hopped on his own crypto-rollercoaster.

Duren bought $5 worth of litecoin in November, and eventually purchased $400 more, mostly with his credit card. In just a few months, he experienced a rally, a crash and a recovery, with the adrenaline highs and lows that come along.

“At first, I was freaking out,” Duren said about watching his portfolio plunge 40 percent at one point. “The precipitous drop came as a shock.”

The 39-year-old Floridian is part of the new class of crypto-investors who do not necessarily think bitcoin will replace the U.S. dollar, or that blockchain will revolutionize modern finance or that dentists should have their own currency.

Dubbed by longtime crypto-investors as “the noobs”– online lingo for “newbies” – they are ordinary investors hopping onto the latest trend, often with little understanding of how cryptocurrencies work or why they exist.

“There has been a big shift in the type of investors we have seen in crypto over the past year,” said Angela Walch, a fellow at the UCL Centre for Blockchain Technologies. “It’s shifted from a small group of techies to average Joes. I overhear conversations about cryptocurrencies everywhere, in coffee shops and airports.”

Walch and other experts cited parallels to the late-1990s, when retail investors jumped into stocks like Pets.com, a short-lived online seller of pet supplies, only to watch their wealth evaporate when the dot-com bubble burst.

Bitcoin is the best-known virtual currency but there are now more than 1,500 to choose from, according to market data website CoinMarketCap, ranging from popular coins like ether and ripple to obscure coins like dentacoin, the one intended for dentists.

Puerto Rico enters cryptocurrency game

Exactly how many “noobs” bought into the craze last year is unclear because each transaction is pseudonymous, meaning it is linked to a unique digital address, and few exchanges collect or share detailed information about their users.

A variety of consumer-friendly websites have made investing much easier, and online forums are now filled with posts from ordinary retail investors who were rarely spotted on the cryptocurrency pages of social news hub Reddit before.

Reuters interviewed eight people who recently made their first foray into digital currency investing. Many were motivated by a fear of missing out on profits during what seemed like a never-ending rally last year.

One bitcoin was worth almost $20,000 in December, up around 1,900 percent from the start of 2017. As of Monday morning it was worth about $10,200 after having fallen as much as 70 percent from its peak. Other coins made even bigger gains and experienced equally dizzying drops over that time frame.

“There was that two-month period last year where all the virtual currencies kept going and up and I had a couple of friends that had invested and they had made five-figure returns,” said Michael Brown, a research analyst in New Jersey, who said he bought around $1,000 worth of ether in December.

“I got swept by the media frenzy,” he said. “You never hear stories of people losing money.”

In the weeks after Brown invested, his holdings soared as much as 75 percent and tumbled as much as 59 percent.

BUY AND “HODL”

Investors who got into bitcoin before its 2013 crash like to refer to themselves as “OGs,” short for “original gangsters.” They tend to shrug off the recent downturn, arguing that cryptocurrencies will be worth much more in the future.

“As crashes go, this is one of the biggest,” said Xavier Levenfiche, who first invested in cryptocurrencies in 2011. “But, in the grand scheme of things, it’s a hiccup on the road to greatness.”

Spooked by the sudden fall but not willing to book a loss, many investors are embracing a mantra known as “HODL.” The term stems from a misspelled post on an online forum during the cryptocurrency crash in 2013, when a user wrote he was “hodling” his bitcoin, instead of “holding.”

Mike Gnitecki, for instance, bought one bitcoin at around $18,000 in December and was sitting on a 43 percent decline, waiting for a recovery.

“I view it as having been a fun side investment similar to a gamble,” said Gnitecki, a paramedic from Texas. “Clearly I lost some money on this particular gamble.”

Duren, the personal finance writer, is also holding onto his litecoin for now, though he regrets having spent $33 on credit card and exchange fees for a $405 investment.

Some retail investors who went big into cryptocurrencies for the first time during the rally last year remain positive.

Didi Taihuttu announced in October that he and his family had sold everything they owned — including their business, home, cars and toys — to move to a “digital nomad” camp in Thailand.

Didi Taihuttu and his family in Thailand. (REUTERS/Courtesy Taihuttu family)

In an interview, Taihuttu said he has no regrets. The crypto-day-trader’s portfolio is in the black, and he predicts one bitcoin will be worth between $30,000 and $50,000 by year-end.

His backup plan is to write a book and perhaps make a movie about his family’s experience.

“We are not in it to become bitcoin millionaires,” Taihuttu said.

(Reporting by Anna Irrera; Editing by Steve Orlofsky; Editing by Lauren Tara LaCapra)




Puerto Rico enters cryptocurrency game

Editor’s note: The following article originally appeared in the Feb. 15-21 print edition of Caribbean Business.

Despite the volatility and general unfamiliarity with cryptocoins, Puerto Rico is about to test the virtual currency market while a growing number of enthusiastic investors are now helping spur a new industry.

An increasing number of individuals and at least four businesses, including a pizza parlor, taxi-service company and a medicinal cannabis store, are accepting digital currencies as a form of payment. Rodolfo Sessman, president of Puerto Rico Bitcoin and partner at Blockchain Trade Center, is slated in about two weeks to install a Bitcoin ATM machine at a Japanese-owned business in Bayamón. As early as August, P.R. Bitcoin will be launching the Kokicoin, a utility cryptocoin designed to be used to buy products and services.

Businesses are being created around cryptocurrencies. Wateke Research has developed a “mining machine” that will allow individuals and companies to make money by monitoring transactions in the digital currency system. During mining, records of current virtual-money transactions, known as a blocks, are added to the record of past transactions, known as the blockchain.

The local government and private sector are also looking at the benefits of Blockchain, a new technology that challenges to replace all forms of central authority with decentralized, peer-to-peer and open-source trust protocol that is also tamper–proof.

Former Puerto Rico CIO, Giancarlo González, recently founded the Government Blockchain Association (GBA) Chapter, a private membership organization that seeks to assist the government and public sector in implementing and benefiting from blockchain technology and capabilities.

Puerto Rico Gov. Ricardo Rosselló is slated to be one of several keynote speakers at the Puerto Rico Crypto Conference slated for March.

Puerto Rico Bitcoin Traders, as well as Kryptolandia, which is owned by Maryluli Soto and her husband, Jimmy Rodríguez, are educating potential investors about the ABC’s of buying and selling cryptocurrencies.

While many Puerto Ricans view with skepticism the idea of investing in virtual currencies, calling it a Ponzi scheme or relating it to fraudulent “dinars” investment (the currency from mainly Islamic countries), cryptocoin investors insist money can be made despite the volatility of the market that it is the currency of future financial markets.

Led by Bitcoin, a digital currency that came to light in 2008 and is considered the “gold” standard of virtual coins, cryptocurrencies account for about $650 billion worldwide, according to Matt’s Market Insights, consisting of more than 1,966 cryptocurrencies, some of which are used solely to buy products and services, whereas others are an investment.

Forbes magazine has said 2018 is the year in which many cryptocurrencies will grow in value while others will dissappear from the market.

Is Puerto Rico on its way to becoming a crypto-paradise?

A group of U.S. and Canadian investors are exploring the possibility of moving to Puerto Rico to avoid paying federal taxes on cryptocurrencies. The U.S. Internal Revenue Service (IRS) does not require a U.S. taxpayer to include income from sources within Puerto Rico if they have resided on the island for an entire taxable year. Local tax laws provide tax incentives for built-in capital gains for new residents, which make the island an attractive tax “utopia” for cryptocurrency millionaires.

“We should not call it a utopia because this is a global thing,” Sessman said.

Economic Development & Commerce Secretary Manuel Laboy said the laws are there to incentivize the cryptocurrency industry, but he noted Puerto Rico will join other jurisdictions in passing laws to prevent fraudulent uses of cryptocurrencies for money laundering or to commit fraud.

“We believe the blockchain technology is going to replace everything in the future and see the possibilities there,” he said.

The 2008 economic crisis in the United States became the catalyst for the creation of cryptocurrencies. According to published reports, Satoshi Nakamoto, which it is still unclear whether this was an individual or a group of people, published a white paper in 2009 elucidating the concept, technology and source code to implement the blockchain. Along with that, he introduced Bitcoin, the world’s first cryptocurrency.

Sessman noted that cryptocurrencies came to light because individuals were looking for ways to buy and sell products through the internet, in an anonymous fashion, since cryptocoins replace money.

There are cryptocurrencies used as an investment tool, but there are many that are used to buy products. For instance, he noted the Cannabis coin is a cryptocurrency for the cannabis community. Chile recently launched the Luka coin, whose goal is to make mining more accessible to the average Chilean.

–Read the rest in Caribbean Business’ epaper here.