Redistribution of The Global Crypto Market. When?
The policy of financial authorities regarding the offshore companies is not characterized by loyalty all over the world countries. Many officials believe that the tax paradise does not fit our sinful land. However, so called free zones have significantly busted the development of technologies and industries. And now we are talking about crypto offshores, quiet tax and legal harbors of the digital economy. Whether offshore zones are needed for crypto economics or not - the deputy representative of Malta in the International Anti-Corruption Academy (IACA) and the operating director of Globiance Oliver La ROSA in his interview for Bitnewstoday.com
- In these latter days we often hear about crypto offshores; is there a problem of leaving of virtual finance for tax heavens, in your opinion? Is it true that offshore jurisdictions are more attractive for digital companies?
- In fact, the best countries, with the most favorable climate for ICO, are not offshores. Small states can adapt to new economic conditions more quickly and can show greater flexibility in the legal and financial regulation. They see their chance to take a worthy place in the world economic system and attract business in it. The question is not about the necessity to establish any special norms for offshore companies but the need of a unified global regulation of DLT and the cryptocurrency. Only with such a wide distribution of legal and economic regulatory mechanisms, we will be able to make the idea of a mass adoption of the cryptocurrency as an asset with value real.
European and world financial regulators are actively looking for legal solutions for de-offshoring of digital financial instruments. As early as 2016, a working group was formed consisting of representatives of Interpol, Europol and the Basel Institute of Management aimed to struggle with the laundering of income from crimes in the cryptocurrency sector. Two years later, IMF chief Christine LAGARDE in the interview with CNN Money stated that one of the main tasks of the fund was to counterwork the use of the cryptocurrency for the illicit capitals legalization and terrorism financing.
- We should admit that many economically developed states themselves push crypto companies out of their jurisdictions. First of all, due to the uncertainty of the legal status of digital assets. Why was Malta one of the first countries with a special tax status decided to accept the crypto industry?
- Let’s be precise, Malta is a member state of the European Union but not a special territory. It is subject to all the rules of European economic regulation. But there will always be those who are the first to accept innovations and new technologies, those who pave the way. Malta did it very successfully with the online gambling sector and again has taken the initiative to create an extensive regulatory framework that is about to regulate not only the cryptocurrency but the entire economy of DLT.
The global legal and regulatory framework of the virtual economy has been being discussed for a long time. One of the sticking points in this issue was the lack of a clear legal definition of the cryptocurrency. Lawyers in many countries understand this phenomenon in different ways and give it various interpretations. One fact is clear: the cryptocurrency is a cross-border instrument and it is impossible to operate only by national legal traditions in the creation of a regulatory framework. It requires a global legal consensus.
- The digital economy will grow every year; it will become more attractive to the economic system of states. Will the competition for the digital market between the countries begin?
- There is and always will be the competition for bringing business into their economic space between the countries. Each state aims to create the most comfortable conditions for entrepreneurship, and each one has certain advantages. Malta has focused on the participants of the virtual assets market, trying to create a favorable environment for them, and, I hope, will cope with this task.
The economic history of the planet consists of trade wars and conflicts. Redistribution of the global cryptocurrency market will inevitably begin. Most likely, it is a question of the nearest time. But Malta has already earned itself a small upper hand. Just like Gibraltar, Cyprus or the Republic of Vanuatu. Their legal systems turned out to be more flexible and mobile, and the policy of the authorities towards the new market sector ended up being far more sensible and pragmatic than any of the “first world countries” had. And that is not about their tax regime.
As far as money laundering and corruption are concerned, the cryptocurrency has an ambivalent character. On the one hand, it is one big world offshore. Tax authorities of different countries have not come up with methods and tools to track incomes from virtual assets yet. On the other hand, due to greater transparency, compared to cash in fiat money, digital tokens can become a good tool to increase the legal awareness of the taxpayers themselves. In any case, there is no development without the dialectical contradiction. If this process stops, then, perhaps, in 10 years, no one will remember the crypto.
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