Puerto Rico has recently used legislation to force capital controls. The country has imposed a 2% fee on any money transmission, forcing Paypal’s to pull out of the country.
Following an attempt to start capital controls, Puerto Rico government passed a law that forces all peer-to-peer transactions to be taxable at a 2% rate. With this move the country’s government is looking to extract any additional sources of income from Puerto Rican citizens.
This was the main reason leading the international online financial institution, PayPal to abandon the country. With the new imposed fees PayPal decided to leave Puerto Rico next month.
PayPal issued the following announcement to Puerto Rico citizens:
“Due to new government policies in Puerto Rico, we have made the difficult decision to no longer offer our person-to-person payment service to our Puerto Rican customers as of November 1, 2015. Our customers in Puerto Rico will no longer be able send money to friends and family abroad with Venmo or PayPal, but will be able to continue to use PayPal to pay for goods and services and receive payments. We regret any inconvenience this may cause our valued customers in Puerto Rico.”
With PayPal out of the scene, bitcoin will inevitably become an excellent substitute for the online payment platform. Not only would it work in a faster and more secure way, making it extremely difficult for funds to be taxed by the government.
Currently, governments are faced with an extremely difficult task of trying to tax bitcoin transactions. And this would become quite a feat for any government who accomplishes that.
For now, PayPal already made announcement saying that it will end its service for Puerto Ricans on October 30, 2015. The gap left by PayPal will surely create additional business opportunities and a new promising market for Bitcoin.