Portugal has become a haven for cryptocurrency enthusiasts due to its poor regulation and low taxes, something that raises doubts in the rest of Europe.
"You don't need to do anything else because you already have a perfect system, with zero taxes on bitcoin," explains Didi Taihuttu, an investor who moved to Portugal with his family from the Netherlands.
"For those who believe in bitcoin, it's paradise," he adds.
Tax authorities around the world are examining the cryptocurrency phenomenon and trying to define what kind of asset they represent.
El Salvador directly considers bitcoin, the cryptocurrency that dominates the market, as legal tender, even though it is immaterial.
From a tax point of view, Portugal also considers it a currency, so it is one of the last countries in which the sale of this cryptocurrency is not subject to tax.
Experts and politicians, such as far-left MP Mariana Mortagua, are warning about the volatility of the situation, with the Portuguese Finance Ministry assuring AFP that it is studying possible changes.
"Portugal has become a tax haven," Mariana Mortagua recently declared.
"It's hard to justify that other financial assets are taxable at 28%, but not cryptocurrencies," admits Pedro Borges of Criptoloja, the first cryptocurrency marketplace in Portugal.
'loophole'
Portugal has a flexible policy for foreign investors in real estate, and also proposes special visas for so-called digital nomads, those who work online, without the need for a fixed residence.
"Portugal has sun, fantastic food and fantastic people" declares Taihuttu, who has settled in the Algarve, a very touristy region in the south.
"Portugal could become one of the best European countries to live and invest in," he adds.
But other sources familiar with the Portuguese legal system are more cautious.
One London tax lawyer, who requested anonymity, explained that he would not advise his clients to invest in this country.
"It is not a long-term strategy of the government to attract companies in the sector, but there is a legal vacuum," he explained to AFP.
"I bet that in ten years, the City (London's financial heartland) will be more permissive than Portugal."
Britain is trying to become a new investment platform for digital enthusiasts, especially after Brexit.
the bubble effect
In the case of Portugal, the pressure for order could come from the European institutions.
Fabio Panetta, a member of the executive board of the European Central Bank (ECB), warned last month that what is happening "has alarming similarities" to the real estate bubble that caused a global crisis in 2007.
Currently, investments in the cryptocurrency world exceed the $1.3 trillion in toxic loans that triggered that financial disaster.
"We cannot repeat the same mistakes, waiting for the bubble to burst," Panetta explained.
"Crypto-evangelists," he charged, promise "paradise on earth" with an entire pyramid network of investments, in which juicy short-term profits are proposed on assets that have no clear monetary backing.
If investors decide to withdraw their money in one go, the pyramid collapses.
The market constantly needs to attract fresh money, which explains the advertising at major sporting events, the participation of big stars from any sector (music, sports, movies...) and, most worryingly, social networks, with messages targeting young people .
Taihuttu's Instagram account looks like a billboard, with sunny beaches, snow vacations, trips... all apparently financed with cryptocurrencies.
His latest proposal is to invest in land with property title registered on the blockchain, a system also used by the so-called NFT or digital tokens, widely used in the art world.
"Portugal needs more jobs and economic growth," he explains. "Why stop the evolution of technology and money?" he asks.
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