From the very first, cryptocurrency and the underlying blockchain technology was designed to offer the benefits of offshore finance via the Internet. Nakamoto’s “decentralized” design is effectively “offshore from everywhere”—accessible anywhere, but resident nowhere. This central purpose has been dressed up ad spun in many ways, but in the end, “trustless” really means “out of the reach of governments”.
It is no surprise, then, that among the usual crypto stories about exchange rates and frauds there is news about physically offshore, hot-money centers that are very interested in cryptocurrency and blockchains. It is a perfect fit.
This spring, the infamous Indian Ocean pirate lair business friendly island paradise has been encouraging blockchain projects to set up in Mauritius, using their laissez–faire Regulatory Sandbox License process. Officials and promoters have been touting Mauritius as a great place to do this kind of business in Coindesk and many other outlets.
I have never been to Mauritius, so I mainly know about it from news headlines about mercenaries, Russian arms dealers, and baffling big power jostling to secure a navy base there. For a tiny little island, far from anywhere, Mauritius seems to enjoy a robust financial system, as well as a reputation as the suspected destination of cash.
The financial industry is very interested in blockchain for many reasons, so there is every reason for Mauritius to get in the game. But I’m sure that they will be very eager to develop easy to use financial instruments and distributed autonomous organizations. This will automate (and harden) the swift movement of money “off shore” and DAOs are ideal for the formation of opaque shell companies.
Naturally, this isn’t what their public relations offensive talks about. The promoters tout Mauritius as being close to India and Africa, which is true but irrelevant for blockchain technology. They recount how Mauritius has a great reputation for clean government, though they are playing in the Africa league, and globally, 49th in the world ain’t that great (that’s just behind Mexico in the league tables).
There is also some smoke about how Mauritius is ideally situate to “jump into new markets on the African continent – where many of the world’s largest unbanked populations exist.” Mauritius may be politically focused on African markets, but there is no reason to locate a blockchain business there rather than anywhere else in the world.
Well, there is a reason: it is a “business friendly” government out of the reach of local regulators in notoriously the difficult African nations. I completely understand why a company would prefer to be in Mauritius that, say, Kenya.
On the other hand, I’m not sure that having the financial system controlled by an unaccountable off shore company, with its own very cozy government, is going to be good for the “unbanked” or anybody else on the continent, except for tax avoiders and fraudsters.
And, of course, this won’t be Mauritians running things, but Americans, Europeans, Chinese, and who knows, exploiting Africans through opaque cut out companies hosted by Mauritius.
Blockchain: the next phase of colonialism in Africa?
- Aaron Stanley, Mauritius: The Tropical Paradise Looking to Become a Blockchain Hub. Coindesk.May 7 2017, http://www.coindesk.com/mauritius-the-tropical-paradise-looking-to-become-a-blockchain-hub/