Andorra – Establishing a regulatory framework for cryptocurrencies and blockchain

Cryptocurrencies are divided when it comes to regulation on an international level. Some countries are in the process of making bitcoin their official currency. And confronted with that, a repressive will that is getting tougher, as is now the case with the MiCA bill in Europe. An inequality that must take sides before drawing up the desired legal framework. And an exercise in style that the Principality of Andorra has just fulfilled. With a rather open trend, but some approaches to review.

Defining a legal framework applicable to the cryptocurrency sector is quite an obstacle course. Of a commensurate increase in the difficulty associated with the desire to limit its adoption and development. A dynamic in which Europe clearly fits its MiCA bill. And a director of the ECB, Christine Lagarde, who never ceases to want to “go further” in the field. To the point where you wonder what aberrations will come from this boundless repressive obsession.

But there are countries in Europe that are not members of the European Union. With the advantage that positions appear that are definitively contrary to the trend imposed on this (too) old continent. As was the case recently with the UK, which decided to drop the identification requirements for self-hosted wallets. While one considers that the potential of cryptocurrencies should be regulated, without however being suppressed. A direction that the Principality of Andorra seems determined to take, with the aim of “encouraging new companies to establish themselves in its territory. »

Andorra – A legal framework for cryptocurrencies

The Principality of Andorra’s approach to cryptocurrencies is not recent. In reality, it has been months since some members of the General Council have worked on a legal text to control its integration into the national economy. A “complex period” according to David Montané, general adviser to the Democrats of Andorra and one of the promoters of the text. Because it is clearly a document presented as “highly technical” with the aim of “regulating many aspects of this digital world.” With the entity responsible for its application, the Financial Authority of Andorra (AFA) responsible for granting licenses and overseeing their effective implementation.

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David Montané explains this digital economy “represents an opportunity for many companies and investors” in Andorra. But also a risk to the ‘credibility’ of his government. That’s why he says that this piece of legislation has ensured that things are “in the most correct way” possible. But the complexity was clearly greater than expected. Because according to some analysts, such as Josselin Tonnellier, co-founder of StackinSat, there is obvious confusion in this piece of legislation between cryptocurrencies, blockchain technology, NFT tokens or Bitcoin. Even though the latter emphasizes that “Andorra is one of the few European countries outside the jurisdiction of the European Parliament. That makes her approach very interesting, with a status comparable to that of Switzerland.

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But another reason seems to fuel the implementation of this bill. And it is in this case the possible deployment of an Andorran “programmable digital sovereign currency”. A kind of central bank (MNBC) digital currency reviewed in the principality’s sauce. With as main calling the ability to act as a means of payment for the general public. But also a new form of issuance of government bonds, so that it can obtain financing. And all without having to go through the “traditional” box for which you have to pay very high costs.

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Two parts of the same law that aim to take digital currencies into account in a broad sense. While it seems important to point out that Central bank currencies – even digital ones – have absolutely nothing to do with cryptocurrencies, such as Bitcoin. One of the reasons why the Principality of Andorra will have to revise its copy to provide some additional details. All this in order to be able to claim to become a hospitable area regarding projects in the sector of cryptocurrencies and blockchain technology.

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