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After three years spent laying groundwork, Catawba Corporations–the economic development arm of the Catawba Indian Nation–is transforming their reservation in Rock Hill, SC into a special economic zone catered to digital asset management, fintech, and cryptocurrency companies. This February the general council of this Indigenous nation, which settled the Carolina Piedmont area roughly 10,000 years ago, passed preliminary legislation to create the Green Earth Zone (GEZ) just 25 miles south of Charlotte, NC.
“A special economic zone (SEZ) is an area in a country that is subject to different economic regulations than other regions within the same country,” Investopedia explains. “Special economic zones (SEZs) are typically created in order to facilitate rapid economic growth by leveraging tax incentives to attract foreign investment and spark technological advancement.”
Once realized, the GEZ will “bring millions of dollars to the tribal citizens, and create numerous employment and education opportunities, transforming the lives of thousands of people,” according to a February 2022 press release by the Corporations. That includes, of course, the Catawba Nation’s current population of approximately 3,000 tribe members.
U.S. law permits Native American Tribes to have their own commercial code, regulation-making, and administrative capacities–empowering the Catawba people “to create a best-in-class regulatory climate for the digital, fintech and blockchain sectors,” Catawba Corporations CEO Ronnie Beck said in the February release, adding that their forthcoming regulatory framework will “protect consumers” and “help mature the industry.” It will also maintain agile flexibility.
Their efforts take cues from Estonia’s eResidency program, launched in 2014 with the “ambition of creating a borderless digital society for global citizens.” The Estonian e-program’s website says it allows participants to “set up and manage a location-independent company online from anywhere in the world,” facilitating necessary operations like applying for a business bank account and filing Estonian taxes. “E-residents also have access to the EU business environment and can use Estonian public e-services.” Today, Estonia’s e-residency program totals 16,000+ companies and 84,000+ e-residents themselves.
Catawba Corporation’s endeavor will offer similar benefits, empowering both domestic and international enterprises to set up U.S. bank accounts and conduct business. “This isn’t a tax play,” said Catawba Digital Economic Zone CEO Joseph McKinney in a recent article by Forbes. Although their definition of “regulatory certainty” hasn’t found concrete footing yet, the Catawba Corporation won’t sacrifice ethics for their bottom line. They’re putting proper Know Your Client (KYC) and Anti Money Laundering (AML) protocols in place.
McKinney sees a potential synergy with Puerto Rico, another quasi-American population known for its tax leniency. “What we’re actually recommending to people is to move to Puerto Rico but have your business registered within the Catawba special economic zone so you could benefit from the jurisdictional arbitrage, while when you’re in Puerto Rico, you’re benefiting from your personal income and capital gains arbitrage,” he said to Forbes.
Although Forbes pointed out “There are over 500 casinos on Native American tribal lands in the United States, plus numerous other businesses that benefit from special regulation in special jurisdictions,” at present, the standard quality of life for Native Americans across the country is abysmal. “Life expectancy of American Indians and Alaska Natives is 5.5 years less than that of the overall US population,” AMA Journal of Ethics said in 2020.” Only 17% of this population pursue any post-high school education compared to 60% of people in the United States as a whole.”
Catawba Corporations board member and Catawba citizen Thom Trimnal said the tribe’s latest move to spark economic activity with their own SEZ “will create economic opportunities that don’t currently exist, including jobs and workforce development.” As the February 2022 press release noted, “Fintech has become a booming industry, with over $91.5 billion in global funding by the end of 2021.”
This March, the GEZ was set to commence registering limited quantities of eCorporations. “In 7 to 10 years, I want it to at least take a huge chunk out of Delaware’s market for company registration or even to replace it as the gold standard,” Trimnal told Forbes. The playing field might not be even, but now Catawba Corporation has the upper hand of inertia. Crypto still gets a bad rap in cross-cultural equity, but this development alongside other recent initiatives harkens a potential, much-needed tide shift. Like JAY-Z lifted in one of his lyrics: “Financial freedom my only hope.”
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