Can Bitcoin save the economy of Puerto Rico?

by | Apr 12, 2019 | Economy | Comments

In 2017, Hurricane Maria gave a massive blow to the already faltering Puerto Rican economy. According to a Harvard University study, the mortality rate in Puerto Rico rose by 62% after Hurricane Maria and there were 4,645 additional deaths in 2017 during the period following Hurricane Maria. The broken power grid and delayed medical care is the culprit in causing such disastrous consequences. Puerto Rico’s heavily indebted government has been unable to organize an efficient recovery effort. Puerto Rico faced not just an economic crisis, but a crisis of confidence for the people in their government.

At this point, many entrepreneurs came in and claimed they had technology to help frustrated citizens rebuild their home independently. These entrepreneurs gained billions of wealth from bitcoin, and what they brought is blockchain, which is the fundamental technology of bitcoin. Blockchain, in the simplest definition, is an online database that is able to maintain transaction records in an encrypted form.

Brock Pierce, one of these billionaires, stated that blockchain could empower people to rebuild without relying on governments or banks. For example, villages could use blockchain to build a communal funds and track how every dollar in this funds is spent. Advocates believed that the blockchain will be helpful to create a trustworthy and efficient restriction system. However, these ideas are rarely put into execution.

The real purpose of these entrepreneurial ventures, however, is likely to build a crypto utopia in Puerto Rico to serve their own financial interests. In Puerto Rico, these billionaires can both keep their US citizenship and enjoy the tax incentives—no federal personal income taxes, no capital gains tax and favorable business taxes. Additionally, Puerto Rico’s economy become more unstable and collapsed after the hurricane, whereby that these entrepreneurs sensed the opportunity and bought great numbers of land and properties. They hope to build a Puertopia, a utopia for cryptocurrencies.

On 2018 March 14, there was a conference named Blockchain Unbound for Puerto Rico and above 500 entrepreneur came together to talk about how blockchain and digital currencies will rebuild Puerto Rico. What they discussed is not just about financial profits or economics influence on Puerto Rico but also about the social impact of blockchain.

Since investors brought considerable wealth to the territory, the local government was receptive to this idea and they have established a blockchain advisory council to amplify the positive impacts of blockchain. Now, you can even pay the taxi driver with bitcoin. The Puertopia is gradually becoming true.