Startups and Bitcoins in Belize

Belizean wildlife reserve is the World’s largest refuge for jaguars. This creature was the sacred symbol of Maya Civilization, which inhabited territories which are nowadays occupied by the present-day Belize in 1500 BC. Mayan were first mentioned in the historical records more than 3000 years ago. 250 A.D. became the Mayan Golden Age. At around 900–1000 AD Mayan Civilization suddenly and mysteriously collapsed. However, today Mayan people still constitute more than 11% of Belizean population.

Various ethnic groups, such as Mestizo (53% of Belize population), Kriol (26%) and Garifuna (6%), had gradually pushed Mayan off their native lands. Spanish conquistadors invaded Belize in the XVI century but didn’t find what they came searching for — the gold. In 1638 first Europeans (so-called Baymen) settled on Bay of Honduras shores. Soon Belize became one of the major producers of logwoods — the source of colorants for European textile manufacturers.

In 1786 Britain appointed the first superintendent to Belize. However, British Crown, weary of Spanish military intervention, had been reluctant to recognize Belize as its colony. Only in 1862 Belize became part of the British Empire under the name of British Honduras. 1950th, 1960th and 1970th had been the years of mounting anti-colonial resistance movement. In 1973 British Honduras was renamed to “Belize”. September 12, 1981 it officially gained its independence.

Belize is the constitutional monarchy within the British Commonwealth. National parliament — bicameral, 43-members National Assembly — is dominated by two political parties: United Democratic Party or UDP (center-right, which holds 25 seats in both houses) and People’s United Party or PUP (left, which has 15 seats).

Bananas, sugar canes and citruses plantations, as well as oil production and tourism sector dominate Belizean economy. Another important source of Belizean state revenues is the offshore banking.

Belize with its subsistence agriculture-based economy, 40% population living under the poverty line and excessive bureaucracy isn’t a good place to launch your high-tech business. Outdated infrastructure (including telecommunication), absence of seed and VC financing and shortage of qualified personnel severely limit local startups growth potentials. At the same time, rapidly developing tourism and hospitality sectors as well as relatively low competition present some limited opportunities for daring entrepreneurs.

Belize’s main financial regulatory body — the International Financial Services Commission (IFSC) — has appeared in crypto-news feeds a few times in a past couple of years to warn public about unlawful or suspicious activities of several crypto-companies. That, to say the least, is highly unusual for a state’s monetary watchdog. We all have been already a little tired to see multiple presumptuous memorandums and nonsensical declarations issued by world’s financial regulators, which right from the first page proclaim Bitcoin with the rest of crypto to be the enemy of humanity.

Against this background IFSC looks as a typical Marvel’s guardian of the galaxy, endowed with an ugly face, and manners but a just soul. Figuratively speaking, Belizean “Groot” is going after bad guys one by one as opposed to all-knowing “Ego’s” indiscriminate slaughter. Matter of fact, compare to most world state finance guardians’ quick-meal, flash-bang, shoot-first-ask-later modus operandi, IFSC’s case-by-case approach to new digital economy participants may be considered as almost civilized.

Of course, at this early stage of crypto-industry’s life most of us would prefer to have either nor regulation at all or a self-regulatory body staffed with crypto-professionals instead of clueless politicians and greedy lawyers. Alas, it’s not the direction things are aiming for most of us. Belizean crypto-community may feel proud for itself being able to steer clear of any official regulations for so long. Coupled with IFSC’s relative civility that may provide crypto-enthusiasts in Belize with a shadow of hope for a better than average crypto-future.

Business Notes for Startups Founders:

  • political climate: not friendly;
  • economic climate: not friendly;
  • regions to focus: locally;
  • industries to focus: e-services (tourism, real-estate), FinTech;
  • major limitations: GDP growth rate at 2% (2017), unemployment rate at 8%, subsistent agriculture based economy, fixed Internet penetration rate under 50%, lack of seed financing, shortage of qualified personnel, population is under 400,000;
  • stimulus: low competition;
  • opportunities: to build an e-services business on local niche markets (particularly in hospitality and tourism sectors).
  • Cryptocurrencies and ICOs (outlook): not regulated (moderately positive).

The author: Svyatoslav (Svet) Sedov

Angel investor and founder of The First International Incubator for Silicon Valley Companies (FirstInternational.In) in the Bay Area, CA, USA.