Andorra Passes Digital Assets Act
Andorra, a tiny European nation wedged between France and Spain, is a bright light of progress. The Andorran government, the General Council of Andorra, has lately approved the Digital Assets Act, which is a regulatory framework for cryptocurrencies and blockchain technology.
The bill is divided into two parts. The first section deals with the development of digital money, also known as “programmable digital sovereign money,” which may be exchanged in a closed system. In reality, this would allow Andorra to develop its own cryptocurrency.
The second section of the bill covers blockchain technology and smart contracts. It discusses digital assets as financial instruments, with the goal of establishing a regulatory framework for blockchain and distributed ledger technologies. The new legislation could attract new clients for Paul (who declined to give his last name), CEO of 21Million, a local Bitcoin firm.
This is a very positive development, as Andorra becomes one of the first countries in the world to develop a regulatory framework for cryptocurrencies and blockchain technology. This will give a boost to innovation and adoption of these technologies in Andorra. It remains to be seen how other countries will follow suit.
What does the Digital Assets Act cover?
Bitcoins, Ethers, and other cryptocurrencies are not legal currency in Andorra. The Digital Assets Act makes no provisions regarding payment methods. This monopoly is solely reserved for the European Central Bank’s chosen money, the euro.
Andorra’s Digital Assets Act is designed to cover three types of digital assets:
1. Cryptocurrencies: Also known as virtual currencies, these are digital units that use cryptography to secure financial transactions and to control the creation of new units. Bitcoin is the best-known cryptocurrency.
2. Blockchain tokens: These are digital units that are stored on a blockchain, which is a decentralised, distributed ledger. Blockchain tokens can represent anything from a virtual currency to a share in a company.
3. Smart contracts: These are computer protocols that facilitate, verify or enforce the negotiation or performance of a contract. Smart contracts are often written on blockchain platforms.
The Digital Assets Act covers all three types of digital assets, but it does not apply to all uses of them. For example, the act does not apply to digital assets that are used solely for personal, family or household purposes.
After a year-long process of deliberation and consultation, the Parliament of Andorra has finally approved the country’s groundbreaking Digital Assets Act. The move makes Andorra the first nation in the world to expressly regulate cryptocurrencies and blockchain technology at a national level.
National newspaper Diari d’Andorra reported that the Digital Assets Act is a step toward “making cryptocurrencies a day-to-day reality.”
This recognition is crucial in allowing businesses to confidently invest in and use cryptocurrencies and blockchain technology without fear of legal ambiguity or regulatory uncertainty. It also opens up the possibility for Andorra to become a hub for crypto-related businesses and activity in the future.