Puerto Rico: low taxes, island life make it hot for bitcoin fans

Agranat and his wife home-school their three children, and for their 14-year-old, they’ve customized the curriculum to include crypto-related topics, including NFTs, crypto games, and token swapping.

Not everyone is happy about the influx of new residents.

For one, locals aren’t thrilled about the fact that they don’t qualify for the capital gains tax exemption, which is designed for non-Puerto Ricans. Mendez tells CNBC the local rate in Puerto Rico is 15% for long-term capital gains, and the disparity has strained relations between some locals and new residents. An organization that goes by #AbolishAct60 has pushed back on the tax breaks via social media.

There is also a question as to whether the tax breaks are achieving what the government set out to do, including, among other things, creating jobs, and sinking more cash into the local economy. Economist and Nobel-prize winner Joseph Stiglitz told a crowd in San Juan in December that he was skeptical of the economic benefits of the tax scheme.

The flood of the crypto rich into Puerto Rico has also helped to drive up real estate prices. 

“The lack of inventory and the high demand has resulted in prices that we have never seen before in Puerto Rico,” said Francisco Diaz Fournier of Luxury Collection Real Estate.

“I’ve been tracking the markets for several years, and I was not expecting this…You have properties in Dorado Beach that have been sold for more than $20 million,” said Fournier, who tells CNBC that there are other properties listed on the market right now for $27 million, $30 million, and $34 million, numbers which have increasingly become par for the course.

Rising real estate prices and the growing cost of living have fanned the flames of resentment.

But Keiko Yoshino, who was a government employee in Washington, D.C., for seven years before making the move to Puerto Rico, is trying to close this divide by running programs that pull the two groups together to facilitate a knowledge transfer. Which, in theory, is part of what the tax incentive program set out to do in the first place.

Yoshino, who runs the Puerto Rico Blockchain Trade Association, plays a major role in planning and running Crypto Curious meet-ups. But a big part of what she’s trying to do is dispel stereotypes.

“I had been called a crypto colonizer,” Yoshino said. “I’m not crypto rich. I was a government employee for seven years. I don’t even have incentives….We need to work on stereotypes going both ways. That’s what I really like about crypto: It’s not a political issue. It doesn’t need to be a social issue. It’s an opportunity to build community.”

This content was originally published here.

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