Bitgive is a long-running Bitcoin-based charity since 2013. Brian Armstrong, Coinbase CEO (link down the right side if you want to use CB to buy or sell crypto) just announced his crypto-based charity fund GiveCrypto. The Pineapple Fund distributed millions in crypto to various charities.
What does this have to do with a map of Puerto Rico?
I have long believed in Bitcoin's power to do good for people and with projects like these three, others believe in it too. Bitcoin is helping Puerto Rico recover from Hurricane Maria. Let's take a look at how Bitcoin and Puerto Rico are helping each other.
Act 20 & Act 22 Simplify Taxes for Blockchain Companies
Act 20 says that if you personally and your business qualifies as tax residents of Puerto Rico, then your business pays a 4% corporate tax rate on all income generated from the Act 20 business. Other than territorial tax jurisdictions, which are places that tax income only generated in country, this is the best corporate tax deal on the planet and compliant with the US too.
This means that locating a business here means you are compliant locally and with the US, a huge benefit for Bitcoin and blockchain businesses.
Act 22 says if you move to Puerto Rico and stay at least 183 days to qualify as a tax resident then you can pay ZERO capital gains tax on your assets. As a US territory, residents of Puerto Rico are exempt from federal taxes except for income generated from sources outside of Puerto Rico. Interest and dividends are exempt too.
Investors, whether investing in blockchain companies or long-term hodlers of Bitcoin can stay compliant, sell, and dramatically reduce their tax liability from the US long-term capital gains tax rate of 20% (and other rates even higher).
Puerto Rico made a conscious decision that they are open for business and looking for businesses and high net-worth individuals to move there and start businesses. The Bitcoin/blockchain industry is listening and starting to act.
Blockchain Unbound Conference in San Juan
Puerto Rico's new advisory council set up in May is targeted at the Bitcoin industry and capped off a week-long group of conferences from March in San Juan called Blockchain Unbound. In this Coindesk article, Manuel Rivera, the PR Secretary of Economic Development and Commerce describes that this is a specific strategy by the island to attract the crypto industry.
The 3-day conference introduced the world that Puerto Rico is back open for business and want to cooperate with the crypto industry.
Prominent early Bitcoin investor and founder of Blockchain Capital and Block.one Brock Pierce is one of the lead guys in bringing crypto businesses to the island, and his Sol project is an attempt to build an ideal crypto city on the island.
San Juan based Noble Bank is a reserve for controversial cryptocurrency exchange liquidity provider Tether. Local businesses are already contributing to the crypto-economy.
Crypto businesses give back in a big way
In March to coincide with Blockchain Unbound, Restart Week included crypto businesses and a cooperative environment between government, crypto, and locals to help the island recover from the hurricanes. May's Restart Week West kicked off with the launch of a new local non-profit and auction designed to raise money locally.
Pierce intends to create a charitable token called One, which will be used to distribute $1 billion worth of his crypto holdings as early as later this year. He and other crypto CEOs are determined to give back to PR and help the island stabilize and grow. He and his wife Crystal Rose are joining up with local nonprofit Integro Foundation in a new entity Restart.One, whose sole purpose is advancing the standard of living of the people of Puerto Rico. I expect we will see more of this as a way to give back to a place that welcomed the industry.
As of early June, The Independent (from the UK) reports that 11,000 PR residents still don't have power as we start the 2018 hurricane season. The money, resources, and backing of the crypto industry could be vital in helping Puerto Rico get through this hurricane season.
While there are some that think this crypto industry takeover of Puerto Rico is strictly a tax avoidance measure, I am more optimistic. Bitcoin alone has created more wealth sooner in younger populations than any technology or industry ever has. I believe that those there to take advantage of the favorable tax status will see the responsibility in helping out their new home, even if it self-serving since better power systems and infrastructure means keeping more of the hardware that helps run their businesses local.
Where have you seen Bitcoin or other cryptos used as a force for good? And how do you think Crypto will affect Puerto Rico long term? Tell me below in the comments.