Legislatures from Puerto Rico Island will hold meetings on the use of blockchain technology to cut corruption. The decision could underpin cryptocurrencies like Bitcoin. The island has been beset by corruption allegations and they believe blockchain technology will help reduce graft cases in the government.
Leaning on Blockchain Technology
The House Speaker of Puerto Rico Rafael ”Tatito” Hernandez said he will meet with the members of Puerto Rico’s growing blockchain industry to discuss creating ‘‘smart contracts.” These will be on embedded computer programs in the protocol. He said that doing his will bring more accountability and transparency to the public sector.
On the sidelines of a Puerto Rico Blockchain Trade Association conference, Hernandez said, ” We have a real credibility problem. And this might be part of the solution.”
The territory of the U.S. of 3.3 million has been infested by graft scandals in recent times. The mayor of Catano pleaded guilty to graft charges on Friday. He accepted luxury watches and more than $100,000 in bribes in exchange for millions in municipal contracts. More public indictments have been suggested by the local FBI offices and they are underway.
Puerto Rico is a Tax Haven
The Speaker said that these meetings are part of a broader plan to make the island a hub for blockchain and cryptocurrency innovation. The island’s tax incentives attract thousands of new Puerto Rico residents. There is no capital gain tax including on cryptocurrency gains. Crypto adopters are taking advantage of the generous tax incentives of the island.
Although the island is part of the U.S., it exempts itself from the mainland’s tax codes and cordons residents from taxes on capital gains. It is the only place on U.S. soil where investments’ income, dividends, and interests are untaxed. Other jurisdictions compete for treasure by offering no taxes or low taxes. An example is El Salvador which directly appeals to the bitcoin community. But only Puerto Rico offers residents an easier way to keep their U.S. citizenship.
The Economic Development Department says the tax break demands have tripled in recent years. In 2021, more than 1,000 people have been approved for the benefits. This has broken the previous record set in 2018.
Hernandez said,” Back in the 60s and 70s we had the niche of manufacturing. This is a new niche, a new opportunity to create jobs.” He added that the blockchain and the cryptocurrency industry might be a way for the bankrupt commonwealth to revive its economy.