The latest The Times article qualifies Puerto Rico as “home to one of the world’s first cryptocurrency communities.” Are they exaggerating or are they on to something? Apparently, favorable tax laws have brought “10,000 well-heeled US migrants” to the island. From those, “an estimated 3,000 of the arrivals are newly minted cryptocurrency millionaires” and “an estimated 4,000 companies and wealthy individuals have relocated to Puerto Rico.”
Those numbers certainly are an exaggeration, but the article is well-written overall. The author, however, is a cryptocurrency newcomer and uses cliché-riddled phrases like “a new currency invented in a flash” and “instant millionaires.” He also qualifies the industry as “one of the most energy-intensive activities in the world,” even though he’s mostly talking about Proof-Of-Stake networks.
In any case, let’s start at the beginning:
“In 2012, though, the government of Puerto Rico, which is an unincorporated territory of the United States, passed a series of acts offering tax incentives to any American investors who want to relocate.”
That resolution caused two phenomena. One, “heavyweight crypto players such as the hedge fund Pantera and the risk management firm Darma Capital have relocated to Puerto Rico.” And two, “some locals are up in arms because they do not enjoy the same tax breaks, and the influx of wealthy outsiders is driving up property prices beyond the reach of existing residents.”
Before jumping to conclusions, remember that in 2017 a storm of epic proportions hit Puerto Rico. “Hurricane Maria was the worst storm in almost a century, bringing winds of 155mph and causing an estimated $90 billion in damage. The entire island lost access to power and regular outages are still common today.” The favorable tax laws are a way of bringing money to the island. And it seems like it’s working.
What’s Happening In Puerto Rico?
The author is torn. On the one hand, he seems to admire crypto’s attitude towards life. On the other, he still believes it’s all magical internet money and that to make it in crypto requires no effort at all.
“In the real world “Pessimism is rife and we seem to be fighting over ever smaller slices of the pie. But what if you could simply grow the pie? What if you could just use technology to create new wealth in an instant?”
On the one hand, the author sees the good, “In recent months Puerto Rico has hosted cryptocurrency conferences and set up beginners’ courses for locals to learn the basics of digital currencies.” On the other, he describes the opposers’ side with cut-throat prose, “The migrants are rootless digital plutocrats — greedy neocolonial tax exiles enacting a fantasy by feasting on Puerto Rico’s desperation.”
HT: https://bitcoinist.com/crypto-influencers-puerto-rico-tax-laws/
