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Author Topic: Spain- Catalonia - Plans on creating a cryptocurrency with an inherent taxation  (Read 219 times)
DdmrDdmr
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March 04, 2019, 09:55:14 AM
 #1

This morning I read an interesting local article in relation Puigdemont, infamous ex-catalan president, and now a fugitive from the Spanish Judicial System that wants to trial him for rebellion. Rather than focusing on the political side of things, I was more concerned with the economical facet. The complete article can be found here: (see Puigdemont quiere que su república digital cuente con un banco y una criptomoneda], which translates as: Puigdemont wants his digital Republic to have a banc and a cryptocurrency).
The core of the article’s content seems to be derived from what Joan Canadell (a Catalan pro-independence businessman of certain entity, with ties to the political sphere) has explained recently, and therefore has it’s weight in terms of aspirational feasibility.

Making an effort to leave the political elements aside, what stands out after reading through the article a couple of times is the fact that there is a wish to create a cryptocurrency for those that are pro-independents to be able to pay their goods with (that would be 50% of the region of Cataluña in the best case scenario). Out of the payments one were to make with this cryptocurrency, a percentage would be transferred to the (seven second) Republic. In other words, this cryptocurrency would inherently be born alongside a digital taxation to finance the Republic.
The cryptocurrency at hand would not be anything like Bitcoin, which is solely a means for speculation (not my words - theirs), but rather a stable coin, tied to the Euro on a 1:1 ratio.

The bank they want to create is pretty universal too in terms of aspiration: You would be able to access the bank through an app, if you have your Catalan republican identity. The bank obviously would offer all it’s charms: heart-felt identity, way lower fees, and much more efficient than other existing banks.
Of course in legal terms, the app-bank would not be able to act as a proper bank in all sense (i.e. bank deposits and credits could not legally be part of it’s portfolio with current legislation), and would rather be more like a financial entity than a self-made bank.

Some of these things are in development, although in my opinion, the chances of them becoming a real thing are pretty slim, and likely the conservation of one’s economical portfolio will conflict with their political aspirations, let alone legislation.

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March 04, 2019, 10:27:29 AM
 #2

A rebellious idea indeed! One of the main reasons for the conflict between Spain and Catalan region is their taxation. Catalan nationalists have been complaining that their region sends way too much money to poorer parts of Spain, as taxes are controlled by Madrid. So it's no wonder that the rebel leader will try to create something that bypasses the existing taxation of Spain and get the money directly to the banks controlled by Catalan nationalists. However, I don't see it happening that easily and can escalate the existing conflict to the next level. It's an interesting idea though and food for thought for many!

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March 04, 2019, 12:46:00 PM
Merited by Mometaskers (1)
 #3

A rebellious idea indeed! One of the main reasons for the conflict between Spain and Catalan region is their taxation. Catalan nationalists have been complaining that their region sends way too much money to poorer parts of Spain, as taxes are controlled by Madrid. So it's no wonder that the rebel leader will try to create something that bypasses the existing taxation of Spain and get the money directly to the banks controlled by Catalan nationalists. However, I don't see it happening that easily and can escalate the existing conflict to the next level. It's an interesting idea though and food for thought for many!

The whole "Catalonia sends too much tax money to Madrid" is actually a myth that was busted by many economists,but the catalan nationalists keep supporting that propaganda.The Pudgedemon idea of a "digital republic" is an utopia.It's pointless.

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March 04, 2019, 01:11:29 PM
 #4

This picture always gets me... If natives want to separate than there is nothing that could change their mind.
IMO further obstructions from central government, will only drive the conflict on to dangerous territory.
I wish those people all the best, maybe it will be the blockchain that sets them free?

The Pudgedemon idea of a "digital republic" is an utopia.It's pointless.
If enough people expresses the will to create this "digital republic", as you adequately putted then why would anyone be against?
Society is a living organism, it can and will change, evolve on it's own, technology plays a vital role as usual in those changes.
Utopia or not, Godspeed Catalonia.

 
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March 04, 2019, 01:16:41 PM
Last edit: March 04, 2019, 02:55:51 PM by DdmrDdmr
 #5

<…>The Pudgedemon idea of a "digital republic" is an utopia.It's pointless.
And yet, as with all this Republic adventure that is based on emotionally driven individuals with not much of a solid rational factual base, and where lies on end pile-up to create an alt-reality, millions from tax payers have been invested into software, so called embassies, and so forth, in a will to keep pushing on a road to nowhere land. Bearing in mind that best case scenario nowadays is that 50% of the Catalan region are in favour of creating a Republic, it leaves out the other 50% who’s against the idea, and who are completely ignored by the Catalan government, and often harassed if they are to show publicly any alignment to being Spanish.

From an economical point of view, the cryptocurrency that is on the table is really yet another source of planned income for the cause, and with that sole objective in mind, the foundations that are at it’s base are weak and far from anything that I would consider trustworthy or with any sort of stability on the horizon.

Currently, the Catalan government has two set of income:
-   The official income, derived from official local taxes and Spanish central tax gathering.

-   The unofficial charity base line, whereby individual and businessmen that are aligned to the cause contribute through uncontrolled mechanisms to the cause.

The planned cryptocurrency I’s say would start-off on the latter scenario, with aspirations to the former from a self-governed point of view.

<…>
The image is actually a derogatory counter-replica on some football playing field. Catalans are often called “Polish” (Polacos) when one wants to refer to then as a collective in a derogatory tone, being the origin not clear (language related, tight with money, alleged parallelism between Spain/Catalonia during the Spanish Civil war and the Invasion of Poland during the Second World War, etc.).

Regardless, many people that believe that Catalonia should be independent do so because of economic reasons which are all but profound and well analysed in terms of feasibility and consequences.
I personally know cases of people who vote in favour of a Catalan Republic with the hope that, were it to succeed, they would be able to stop paying their mortgage to a bank that resides in Spain. A couple more that I know believe that since Catalonia would not pay it’s debts, then the Republican wonderland would swim in pool of Euros Croats o Catcoins that will make everyone richer.

The fact that the idea is only vouched by 50% of the population of Catalonia (7,5% of the population of Spain), and that Spanish constitution does not currently support the segregation of its territories, makes it a constant source of friction on the day to day encounter of the residents in Catalonia

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March 04, 2019, 03:09:05 PM
 #6

If they truly want to be an autonomous region/country from Spain they should really be focusing on having their own currency first as they must focus on having their own established government even before they plan other things. Right now they are not still recognized by any international governing body as a independent state away from Spain which if they plan to have their own money it's value would only be limited to their region. I don't even get why they need to have their own cryptcurrencyif they will still pattern it out to Euro which is also the money of Spain.

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March 04, 2019, 03:10:12 PM
 #7

Making an effort to leave the political elements aside, what stands out after reading through the article a couple of times is the fact that there is a wish to create a cryptocurrency for those that are pro-independents to be able to pay their goods with (that would be 50% of the region of Cataluña in the best case scenario). Out of the payments one were to make with this cryptocurrency, a percentage would be transferred to the (seven second) Republic. In other words, this cryptocurrency would inherently be born alongside a digital taxation to finance the Republic.


It's all nice till you hit one important thing, the others must accept your currency or it will turn into a pile of worthless Zimbabwe dollars and Venezuelan bolivars.
A closed economy where they use only their coin and on the outside is pegged to the euro sounds wonderful on paper, but the moment international trade comes into place, and Catalonia is heavily dependent on those, is a different story.

What he is trying to do is gain a little more attention riding the crypto hype wave as the movement is dying down.
People are watching the UK struggling to get out of a union, and we're talking about the 5th largest economy in the world, Catalonia is trying to secede and their GDP is on par with...Romania.

Society is a living organism, it can and will change, evolve on it's own,
... and die if the brain is too stupid to prevent the organism from falling down a cliff.


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March 04, 2019, 04:17:08 PM
 #8

The image is actually a derogatory counter-replica on some football playing field. Catalans are often called “Polish” (Polacos) when one wants to refer to then as a collective in a derogatory tone, being the origin not clear.
Something tells me that there is a part of the (hi)story we are missing here but hush-hush, let them churches write their own tale.
Besides it's funny that in this day and age, people still use names of other nations to offend each other... to be honest I would treat such comparison as a compliment but whatever. 
 
The fact that the idea is only vouched by 50% of the population of Catalonia
You have any source for this info? Was there a referendum or is it something taken from television's sounding?
I'm seriously interested, not a sarcastic question although with sarcastic opinion about public polls made by modern media.

Society is a living organism, it can and will change, evolve on it's own,
... and die if the brain is too stupid to prevent the organism from falling down a cliff.
But who and how is to decide that any particular move is the leap of fate?
You? I'm sure I can't and so, I will never allow myself to tell people how they suppose to live out their lives.
Anyway it's not like such decisions have the power to eradicate an entire population. So it's an invalid point.

 
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March 04, 2019, 04:27:03 PM
 #9

It would make so much more sense than trying to create a new banknote currency. Catalonia is right now in a sense running its own country inside another country.

Spain of course wouldn't allow them to have their freedom but if you ask anyone there they would rather have their own freedom, I wouldn't want to go into politics as well but we are talking about a group of people wanting to get out of a nation but forced military-wise to stay in that country which can't continue forever, Spain can't continue to fight Catalonia's freedom forever.

Now, in this system and issue we can't assume Catalonia to build their economic system with banknotes and banks and so forth which means they could use cryptocurrency to use among each other and not pay a single tax on Spain that way and somehow get a bit closer to their financial freedom to begin with. That's why it should be done and looks like a great idea.
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March 04, 2019, 04:47:58 PM
Last edit: March 04, 2019, 05:04:53 PM by DdmrDdmr
Merited by poptok1 (1)
 #10

<…> You have any source for this info? Was there a referendum or is it something taken from television's sounding?
I'm seriously interested, not a sarcastic question although with sarcastic opinion about public polls made by modern media. <…>
The figure does not come from a poll, but rather form the last Catalan elections that took place at the end of 2017. On that occasion, a group of political parties ( JxC + ERC + CUP) created a common pro-independent front, obtaining 2.063.361 votes (48,25%). The political parties that were not clearly in favour (C's + PSC + En Comú + PP) obtained 2.212.871 votes (51,75%).  See (https://www.elconfidencial.com/espana/cataluna/elecciones-catalanas/2017-12-22/elecciones-cataluna-votos-localidades-abstencion_1497237/ as a reference – in Spanish).
Nevertheless, the actual seats allocated in the Catalan Government favoured by a few the pro-independentist (seats depend on territorial density), and thus they are the ones that formed the government.

The 1-O illegal referendum that took place on the first of October 2017 stated as a result that 90,20% of the population in Catalonia was in favour of independence. Of course, the people that voted were basically only those that were in favour to begin with (2.286.217 people voted, 2.044.038 of which voted to create the (seven second) Republic of Catalonia).

The above figures are way better than any poll (which, with the current political situation are bound to be biased), and although there has always been an independentist movement, never has it been stronger than over the past few years, thus upping the conflict to political, economic, and social grounds.


<…> Spain of course wouldn't allow them to have their freedom but if you ask anyone there they would rather have their own freedom <…>
No, that is what they try to sell (and pretty well it seems) abroad. As I’ve stated above, at best there is a technical tie between people in favour and people against creating an independent Catalan Republic within the geographical region of Cataluña. Just based on that fact there in no way in hell that this can crystalize in a seamless manner, not to mention that Catalonia is part of Spain and, therefore, meets the full opposition of a way larger mass.

Freedom is a term that has a strong appeal for empathy, but there is no lack of freedom here (aside for the freedom to create a country against the current Constitution). There is a lack of freedom in Catalonia though to proclaim your sympathies to remaining in Spain. Political representatives and citizens are harassed for doing so.

The proclamation of the 7 second Republic, which the politicians are now denying before the judges and claiming it was only political and not real, took its toll on the economical side of things: thousands of companies moved their headquarters outside of Catalonia (to other parts of Spain), and an estimate of 35.000 millions were moved to bank accounts that were tied to an address anywhere in Spain outside of Catalonia. Some may have tricked back, but that is a big warning sign on the economy front, with many just a few mouse-clicks away from shifting their assets to another territory, should things keep on getting any worse.

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March 04, 2019, 07:10:37 PM
Last edit: March 04, 2019, 10:21:57 PM by stompix
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 #11

But who and how is to decide that any particular move is the leap of fate?
You? I'm sure I can't and so, I will never allow myself to tell people how they suppose to live out their lives.

I am a member of this form, a human being and ... a living organism  Grin and I am expressing my opinion, I'm not telling them how to live their lives I'm telling you that humans, when stop using their brain, are make a lot of mistakes and or history is full of events when people thought that they are doing something good and it ended with millions dead. The Great Leap Forward is the best example when you want something good to happen and you fail miserably.

Besides this whole "don't tell me what I should do" is pretty funny since our first day we are told what to do and what to not do, we have laws that tell us what we are allowed and what we are not allowed to do our whole life.

You want to go camping, yes you are free to do it..but

You must have a driver license, you must have insurance and inspection up to date, you must drive legally, you must wear a seatbelt, you must camp only in  designated areas, you can't fish unless it's open season(lol), you can't pick up flowers that are protected by law, you can't start a barbecue outside the camping site, you can't feed the bears....

But you're free to go camping Tongue

Anyway it's not like such decisions have the power to eradicate an entire population. So it's an invalid point.

Not eradicate, but get them on the same level as Bosnia...

Oh, and once Catalonia decides it's fed up with Madrid, goes independent and the new capital is Barcelona, what is going to stop people in Tarragona to want independence from Barcelona?
And then if the people from Montesia want independence from Tarragona?
And if the people from Alcanar are fed up with the leaders from Amposta (Montesia) ?
And what if the 92 people living in La Selleta will want independence from Alcanar ?

What could go wrong?

In a world where unity plays a key role and the countries with the strongest economy rule the world, it makes zero sense to smash your own nations in a thousand worthless pieces.

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March 04, 2019, 07:28:21 PM
 #12

But you're free to go camping  Tongue
That's of course all true, we are free but... but this philosophy discourse is getting heavily off topic and should not be continued here.
You can make a thread and invite me to it, if you like of course.

Quote
In a world where unity plays a key role and the countries with the strongest economy rule the world, it makes zero sense to smash your own nations in a thousand worthless pieces.

Judging by your knowledge of demography and details of this area, I presume you are a Spaniard.
Fate of the country is of course of great importance to you but let's restrain ourselves from exaggerating.
Nobody is claiming that chopping Spain in to 1000 pieces is a good thing.
Pro tip: did you know that Germany is not a country?  It's a federation of 16 small republics? Go figure Smiley

 
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March 04, 2019, 07:42:45 PM
 #13

I'm interested on how Spain would react to this. So, they are basically going to "mint" their own currency out of nowhere and peg it to the euro or is this money coming in from their own economy ("mint" it and exchange for existing fiat like how new bitcoins enter circulation)? I also don't get the part where one cannot "deposit". Maybe the money would just be tied to an individual's wallet?

What could happen is it'll just be some token used by just 50% of people in Catalonia. Guess that would be manageable enough for their system since there'll just be a few user and they might be able to use it for f2f transactions.

 
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March 04, 2019, 07:57:36 PM
Merited by DdmrDdmr (1)
 #14

Fate of the country is of course of great importance to you but let's restrain ourselves from exaggerating.
Nobody is claiming that chopping Spain in to 1000 pieces is a good thing.
Pro tip: did you know that Germany is not a country?  It's a federation of 16 small republics? Go figure Smiley

Nope, not Spaniard here.

So, about the German example, do they have the same president, chancellor, coin (since this is what triggered the discussion), national anthem, id cards, and one national football team?
And since we're on trivia time, did you know that Scotland, Wales, and England compete as different countries in FIFA championships but the GB does as one in the Olympics?  Grin Grin

Catalonia supporters don't want a federal republic, they want independence, their own country with borders
The referendum asked those questions
Quote
"Do you want Catalonia to become a State?" and "Do you want this State to be independent?"

Nothing like being part of Germany or the US or even Russia with its autonomous regions

Either way, the movement died down, this is why the usual agitators come with stupid ideas like a crypto coin.
What is a coin going to solve that normal fiat won't, especially since you're pegging the value and you print as much as you can?

At least they didn't add the magic word "ICO" or the new hype, "STO"  Smiley
Seems like a trend for a failed government like Venezuela and Iran or non-existent ones are proposing cryptos as a solution!


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March 04, 2019, 08:23:08 PM
 #15

A rebellious idea indeed! One of the main reasons for the conflict between Spain and Catalan region is their taxation. Catalan nationalists have been complaining that their region sends way too much money to poorer parts of Spain, as taxes are controlled by Madrid. So it's no wonder that the rebel leader will try to create something that bypasses the existing taxation of Spain and get the money directly to the banks controlled by Catalan nationalists. However, I don't see it happening that easily and can escalate the existing conflict to the next level. It's an interesting idea though and food for thought for many!

The whole "Catalonia sends too much tax money to Madrid" is actually a myth that was busted by many economists,but the catalan nationalists keep supporting that propaganda.The Pudgedemon idea of a "digital republic" is an utopia.It's pointless.
Even doesn't matter if that is myth or not, currently Catalonia is part of Spain and if there are poor places in Spain, whole budget has to be used to fix it, that happens in every sector. Imagine Walmart didn't use budget globally for it's own network and each budget was taking care of each store, that would be silly (I took walmart just for example).
Also at the same time we have to consider that if government creates cryptocurrency, that's because to benefit government, then what's wrong with bitcoin, ethereum, thether (if we want stable one) and etc? Nothing, but it's just a great (for them) and at the same time legit reason to speed up progress of making Catalonia independent. Maybe soon they'll try to move fully on it but I think Spain won't let them to do it.

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March 04, 2019, 08:41:06 PM
 #16

<…>
Kind of like the examples I make when talking to others about this topic. Taken to an extreme, I could decide to be independent from the whole system and decide not to pay taxes at all. I could, but the consequences (for me) are pretty obvious. After all, there is a big difference between what I may wish to do, and what I can actually do without setting a hell storm in motion.

Another example that goes in this same direction is that of Tabarnia. Tabarnia started off as a parody to mirror what could happen if the terrorories within Catalonia, that were in essence over 50% pro-Spain, were to all join efforts and constitute what is called an Autonomous Community within Spain (just as Catalonia is now), segregated from Catalonia. The map would look something like this: https://www.tabarnia.org/web/solucion-al-independentismo-catalan-aplicar-el-articulo-144-y-crear-tabarnia.
The parody moved on to something more serious, and although it is still an outlier idea, many do not frown upon it.


<…>
Regardless of how other countries are organized within their boundries, the territories that conform Spain are all submitted to the Spanish constitution, and thus that is the only set of rules that really apply. By the way, as far as I’m aware, Germany does not allow for the existence of secessionist parties within it’s parliament. Spain does, and they represent a frequently important and influential partner of whoever is in the central government of Spain. At least until now.

Just a small example of what this power of influence has managed to do: In Catalonia, the kids at school have Catalan as the core educational language, and Spanish is being used solely for the Spanish subject itself (3 hours per week). That takes place when officially, both Catalan and Spanish are co-official languages in the territory.

<…>
That is the idea. The Spanish government would likely confront it from the tax evading side of things if the cryptocurrency were to actually become widely extended. I’m not personally too convinced it will take much of a flight, less of all with all it entails to engage people to stop using FIAT and use a technology which is not natural to them and has inherent risk. It may start off as a means to gain a bit of extra income, off the books, but I’m not really convinced on the traction and extent it will have (even if 50% of the population could potentially use it, what percentage would actually venture the risk, and know how to use it? It’s not as if crypto is a commodity or anywhere near it yet). Sound a bit like Petro V 2.0 (many differences, I know, but the outcome may not differ too much from a fiasco in either case).

By "deposit" I was referring bank deposit (i.e. place money in the bank at a fixed rate, and retrieve it after a period of time with the associated interests). Apparently, the Catalan digital Republic would have dire problems to open a bank as such with all the legal requirements complied.

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March 05, 2019, 09:31:27 AM
 #17

Tried opening the article but Translate didn't do a good job. So from what I'm understanding, it's supposed to be for face to face transactions right? Like, I want a haircut and I pay you in CatCoin directly? Where does the taxation come in?

I've seen a previous response about the Catalan government not being able to hold the money and give out interest like a bank so I'm assuming there'll be some sort of transaction fee for using it that goes to the Catalan gov't which operates it? If we think about it, if the fees are negligible to the users, the regional gov't can really earn a lot from just economic activity.
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March 05, 2019, 10:01:08 AM
 #18

<…>
As far as I can understand, the tax would come from the TX fees, although it may even be a percentage of the purchases one makes using the cryptocurrency. After all, it does look like a pretty closed loop, where by one subscribes to the Digital Republic, pays some initial fees, and then gets access to the bank that probably give access to the Catalan cryptocurrency. The procedure for acquiring the crypto is not explained, and may or may not be tied to the bank itself. Anonymity in perhaps not high on the scale here.

I’ll translate the part of the article that references this:

The banc would only be one of the supports of a wider project. As Canadell explains in these acts (meetings), a cryptocurrency would also be launched, a digital currency, like Bitcoin, so that the pro-independent could pay with it. “And where those payments would have a percentage paid out to the Republic”, said Joan Canadell in an act in Vic.
When asked further, Canadell admits that this represents a kind of digital taxation that ultimately would serve the purpose of financing the Republic.


In Spain, each Comunidad Autónoma (territorial grouping that has its own government and many competences transferred from the Central Government) can go to the market to obtain loans to finance its expenses, or call on the Central Spanish Goverment. A specific problem in Catalonia is that rating companies have, over the past years, given Catalonia very poor ratings due to the situation, close to trash at times. Catalonia has then needed to obtain loans form the Central Spanish government, although it aims at not doing so eventually.

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March 05, 2019, 01:58:07 PM
 #19

I do not even see this ever becoming a reality will buttress on this and they having to refer to bitcoin as a means of speculation, is dumb of them. Bitcoin is volatile and even its investors are aware of it and there’s really no risk in Bitcoin investment, whoever loses in bitcoin does this because of  impatience and back to my point, Spain and Catalan region have always been in disagreement and taxation is one of the reason why they never agree.

The nationalist of Catalan region have not been happy with the way money is been sent from their place to the poorer part of  Spain because Madrid controls the process so the  am very sure that the reason their leader  is trying to make a coin that will get them money straight to their bank hereby avoiding the tax of Spain and this would even bring about more conflict.
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March 06, 2019, 12:11:16 AM
Merited by DdmrDdmr (2)
 #20




I am Spanish and I can speak with knowledge of the facts.
Catalan politicians are not realistic and are only trying to confuse the population.

For months now many Catalans have been taking their savings out of Catalonia.
All that money goes is deposited in Spanish banks outside Catalonia.
Catalans don't trust their politicians.


The last "occurrence" of Catalan politicians (to attract attention) is to remove stop signals.   Cheesy Cheesy Cheesy


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Catalonia looks a lot like a circus.
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