Digital Paradise. Blockchain Solutions Poised to Revolutionize How The Bahamas Does Business
Blockchain technology has introduced tremendous opportunities to geographic areas across the globe who are looking to improve their economies, attract foreign investment and streamline their business registration processes.
Early adopters get much of the publicity and prestige when integrating new technologies and innovations into the marketplace. But being first to market means they are also the first to encounter problems, challenges, and unexpected hurdles. Learning from them, and improving upon solutions, presents a real and lasting opportunity. This is especially true when it comes to blockchain technology.
This article takes an in-depth look at:
- How blockchain technology works
- How governments are utilizing blockchain technologies to improve their economies and attract foreign investment.
- The emerging leaders in the race to becoming the most digital-friendly nation.
- Challenges facing early adopters.
- The benefits in establishing the Bahamas as a digital paradise.
Those who have been following blockchain’s evolution are uniquely positioned to capitalize on its strengths, overcome early-adopter obstacles, and achieve results in terms of growth, flexibility, security, and ease of doing business. The Bahamas is ideally situated to become a leading digital paradise.
How? Read on to learn more.
Blockchain, in the simplest of terms, is a new type of digital system architecture that allows for verification without having to be dependent on third-parties.
Take Bitcoin, for example. As a basic ‘Proof of Work’ chain, each bit of digital data – or block – is added to the end of the chain using cryptography as it’s created. Each block contains a timestamp and a link to the previous block.
Here’s where that gets interesting: instead of one centralized copy of that chain, there are thousands if not millions of them stored on computers around the world. Each one is updated in real-time as new blocks are added.
The system self-regulates by verifying each block against each others copy, and any difference is quickly identified and fixed to reflect the majority.
Blockchain is essentially a digital ledger of information stored chronologically in blocks to allow for the efficient and nearly instantaneous processing, transfer, verification, and storage of data.
It’s already revolutionizing sectors including finance, healthcare, business, and even government itself by reducing the risk, cost, and complexity of storing and transmitting digital information while increasing both security and transparency.
Blockchain owes its popularity and effectiveness to this independence, accountability, and immutability.
How Innovation Bolsters Economies
Regions that embrace emerging blockchain technology and innovation while creating laws, regulations, and digital infrastructures will establish themselves as leading world business locations in 2019 and beyond.
Why? Digital Asset Businesses are hungry for areas with both stable economies and legislation that is friendly to their own goals and agenda. These organizations and their visionary founders are building a wave of digital asset innovations. They want to focus on developing their product – and their community. To do this, they need a regulated environment where they can easily set up their companies, stay in compliance, generate liquidity and access capital.
Currently, they face regulatory uncertainty, are challenged to remediate existing tokens, and are frustrated by paper-based corporate registration.
As the global business landscape continues to evolve, they’re looking for trusted advisors to help in identifying the most advantageous platform, designing their blockchain solution, and ultimately tokenizing their business.
Any location investing in these emerging technologies and building digital infrastructures are likely to improve their ranking in the Ease of Doing Business Index and become more friendly destinations for Digital Asset Businesses.
These innovators are turning to blockchain technology to:
- Automate the business registration process.
- Digitize currencies.
- Prioritize privacy and data protection, combat fraud, and increase security.
- Increase transparency to simplify oversight by organizations like the SEC.
- Better manage immigration.
- Respond to issues with greater innovation and speed.
- Reduce costs and wait times.
- Improve access to information.
Estonia, for example, has successfully transitioned to a virtual, borderless government entity built on a secure blockchain foundation. Residents can complete all bureaucratic processes online, with information conveniently pulled from its corresponding chain. Voting, buying a house, paying taxes, visiting a doctor, challenging a parking ticket, and more is done without the hassle of having to physically go to a government building, gathering the necessary information and documentation, or filling out mountains of paperwork.
Everyone from banks to regulators work together to develop innovative ideas and solutions that are then shared with the government.
Wired magazine named it the most advanced digital society in the world. Just how inviting is that to foreign investment?
In a word: very.
Emerging Leaders: Digital-Friendly Nations
Estonia is certainly not alone in its digital revolution. Switzerland, Japan, and Malta amongst others are actively embracing blockchain technologies and optimizing their economic environments for Digital Asset Businesses.
Malta, in particular, has rebranded itself as Blockchain Island, and investors have answered the call. It has attracted some of the largest crypto exchanges – including Binance, OKEx, and ZBE – to set up shop on the tiny island nation.
The Mediterranean island is also writing laws today to reflect the economy of tomorrow rather than applying out-dated models and regulations to it. And that difference is key to attracting investors by removing regulatory concern and uncertainty.
Malta has passed forward-thinking legislation like the Technology Arrangement Bill and Virtual Currency Bill, as well as the creation of a new regulatory body dedicated to blockchain business called the Digital Innovation Authority (MDIA) and banking sector reforms.
To further strengthen its ambition, the island has introduced new government programs and university departments to meet the demand for blockchain savvy experts and employees from within its 460,000 citizens. It’s been forecasted that their commitment to this digital economy will “decrease their already low unemployment rate of 4.4% possibly by another 2% or so in the coming years.”
The results so far have been impressive, driving massive interest and investment in a country many previously could not locate on a map. Even Apple co-founder Steve Wozniak plans to register his new blockchain tech company EQUI with the MDIA.
But it hasn’t been without its stumbling blocks.
Challenges in Emerging Nations
While Malta is doing everything it can to build a complete blockchain ecosystem, it as yet does not have a digital registration system in place.
Without it, the European Union recently instructed Malta to improve and strengthen its anti-money laundering (AML) policing to keep pace with growth within its cryptocurrency and financial industries.
That leaves Malta essentially playing catch-up.
Similar shortcomings were recently uncovered in Spain, too. Criminal elements in Madrid were using loopholes in cryptocurrency regulations to launder large sums of money for drug traffickers in Colombia via Bitcoin ATMs.
A secure, digital onboarding system would address these issues from the onset. A federated digital ID required before joining a digital economy ensures that participants are known and regulated prior to any actual transactions taking place.
Bitcoin, like traditional cash, has no identity stamped to it. A digital ID on a blockchain platform makes issues like this a thing of the past.
“You can not launder money
with a digital ID.”
~Ott Vatter, Director of Estonia’s e-Residency Program
Even Estonia isn’t immune to challenges. The country has seen returns of $20 million in collected taxes and fees, as well as the creation of 6500 companies since launching its e-Residency program nearly five years ago.
That said, it recognizes that access to banking services has been problematic for e-residents.
Other issues appearing in blockchain-friendly regions like Gibraltar, France, Monaco, and the Cayman Islands include:
- Limited or absent systems to account for and tax cryptocurrencies while integrating them into existing auditing platforms.
- Current regulations make getting a local bank account difficult or impossible for businesses dealing in cryptocurrencies.
- Ever-changing regulations that can dramatically impact a Digital Asset Business’ profitability and create confusion in accounting and reporting functions.
- Companies have been quick to tokenize without doing the up front, onboarding steps necessary to make for a smooth transition.
- Taxation challenges related to cryptocurrency’s classification as either a currency or commodity.
- Locations are digital-friendly, but not regulatory-friendly, with little thought given to the ramifications of tokenized exchanges and protecting themselves.
Without a digital registration system – allowing for quick and easy scaling by reducing slow, complex, paper-based systems – and appropriate regulations in place, none can offer the perfect solution.
Systems need to be both digital and regulatory-friendly. Wyoming, for example, recently enacted 13 blockchain-enabling laws that make it the only U.S. state with a comprehensive, welcoming legal framework for the technology.
Establishing the Bahamas as a Digital Paradise
The Bahamas is ideally situated to become a leading digital paradise.
“Digitisation of our government and financial services complements both our ease of doing business initiatives and our digital Bahamas framework. As a first step in our ease of doing business initiative, we would have moved to a new online interface for start-up companies registering their business for the first time in The Bahamas.”
~K. Peter Turnquest,
Deputy Prime Minister and Minister of Finance of the Bahamas
The Bahamian government has already declared its intention to not only invest in blockchain technology, infrastructure, and regulation but to create a national digital currency as well.
With those systems in place, it would be able to more effectively provide private and public services – including business licenses, passports, digital IDs, and national insurance – on an accessible-to-all and secure platform with a single point of data entry.
An island cryptocurrency would better serve those residents without access to traditional banking in a digital and secure environment, in addition to decreasing costs and improving transactional efficiency for them.
But that’s not all.
Blockchain will revolutionize and spark innovation across a wide array of sectors:
- Increase ranking on the Ease of Doing Business Index via the dedicated focus on blockchain and emerging technologies that companies want.
- Improve government transparency.
- Decrease corruption by eliminating the human component of both public and private services.
- Enhance the Bahamian bid for WTO reactivation.
- Deliver and influx of money into the economy through foreign niche investments and the demand for local blockchain developers and talent.
- Decrease tax debt through a streamlined digital collection platform.
- Empower Bahamians to protect, maintain, and share their data in a secure and verifiable way.
- Improve the efficiency and speed of foreign investment, namely with Digital Asset Businesses, from registration through the entire life-cycle of the business.
- Eliminate intermediaries while allowing for direct transactions between suppliers, customers, distributors, partners, and the government itself.
The Bahamas as a digital paradise presents an innovative and sought-after differentiator on the world stage at a time when lines on the map are blurring if not disappearing altogether for companies both big and small.
Additionally, the concept of an e-offshore business – an automated and fully digital tax-reduced organization – is a powerful and compelling draw for start-ups and established businesses looking to evolve with the changing landscape.
In short, a commitment to the blockchain revolution and the creation of a digital economy would drastically reduce corruption, boost the GDP, and position the Bahamas as the digital paradise the world is waiting for.
And the timing couldn’t be better.
What exactly is the typical Digital Asset Business looking for in a “digital paradise”?
What differentiates one from another?
- They want a market large enough to matter, but small enough to be responsive and allow for quick change and implementation. The Bahamas and its 400,000 residents are the ideal sizes.
- They want a region both politically and economically stable. The Bahamas has an internationally recognized reputation for stability, operating as a parliamentary democracy for over 280 years, and it is the third richest country in the New World, behind only Canada and the United States.
- They ideally want somewhere in the Eastern time zone.
- They want English, which is the official language of the Bahamas.
- They want to ideally be close to North America. The Bahamian island of Bimini is only 50 miles from Florida, and a flight from the capital of Nassau to Miami is just 60 minutes.
- They want a strong financial sector. More than 250 banks and trust companies are licensed in the Bahamas.
- They want to see a strong desire to innovate and boost foreign investment. The recent announcements from the Bahamian government demonstrates their commitment to both.
- They want a strong telecommunications infrastructure. The Bahamas has a very high mobile telephone and internet penetration across its islands.
The Bahamas checks all the right boxes.
In addition to that, the region benefits from those blockchain areas that went before it. The weight of discovery carried by early adopters and first-to-market can often be a tremendous obstacle and burden.
Trailblazers may get a lot of attention, but they also have the hardest job. Those that follow have an existing path before them, and the ability to evaluate and improve upon it where necessary.
When it comes to nascent technology, advancements come fast and furious. We went from the first flight by the Wright brothers at Kitty Hawk to landing on the moon in less than 70 years. What was cutting-edge today is often outdated and obsolete tomorrow.
The first digital adopters now find themselves with sun-setting technology that is no longer blazing a trail. By looking at their successes, failures, and challenges, it’s possible to essentially leapfrog over them from a position at the starting line.
We can skip over legacy systems and implement a better system prepared to face not only existing challenges, but also new ones on the horizon.
The benefit of hindsight can not be overstated.
The implementation of blockchain and digital solutions in the Bahamas can be likened to mobile phone penetration in sub-Saharan Africa.
The 37 countries of that region were able to learn from those that implemented mobile solutions years or even decades before it. It entirely skipped outdated landline platforms in favour of mobile networks to finally connect its places and people. Sub-Saharan Africa is now the world’s fastest growing mobile region.
What they learned from the rest of the world to leapfrog every other area, the Bahamas can learn by looking at the other digital paradise contenders already in the race.
Even better, you can leave that to us.
This is your opportunity, and the time is now. The potential — and power — of integrated blockchain solutions allow Digital Asset Businesses and countries to evolve with the changing global business, financial, regulatory, and security landscape. Learn from the past, plan for the future, and capitalize on the present.