Startups and Bitcoins in Micronesia

Micronesian history is dated back four thousands years when the first settlers' company visited the Yap region. However, a better part of the Micronesian history still remains a mystery due to lack of written records and archaeological artifacts. At the end of 19th century Micronesia had been one of Spanish dominions, until, after the Spanish-American war, it was sold to Germany. Japan army occupied Micronesia during the World War II. After the end of the war, USA started to exercise an administrative control over this region under the auspices of the UN Resolution 21. As a result, in 1979, the part of Micronesian islands decided to enter into the Compact of Free Association with USA as an independent state named Federated States of Micronesia (FSM).

The head of the Micronesian government is its president, which is selected by the local senators from its own rank. The chosen senator must be the representative of one of four FSM States: Yap, Chuuk, Pohnpei or Kosrae. Fourteen-members unicameral Congress of the Federated States of Micronesia consists of native tribal leaders and non-partisan representatives. There are not political parties in FSM.

FSM budget heavily relies on two sources: the US financial assistance and fishing rights' sale amounting to $20 million yearly. Other sources of revenues include marine products export to Japan, which accounts to 85% of total FSM sale to another countries, and the proceeds from licensing agreements for using "fm" first-level domain name. At the same time, the local tourism industry, which serves to over fifteen thousands international travelers visiting FSM each year, remains ostensibly subdued.

FSM is the small, isolated island nation, which possesses no drivers to ensure high-tech industry's growth. FSM economy mostly depends on external financial assistance and fishing. Other negative factors include tiny population, absence of qualified work-force and the rudimentary infrastructure. Still, given the local tourism industry slow but continuous expansion, there may be some limited profit opportunities found for mobile Internet startups founders.

The Federated States of Micronesia does not have laws regulating cryptocurrencies, which makes trading crpto or organizing ICOs technically legal in FSM. However, as an US associated state, which uses US dollar as a national currency, FSM will likely be closely following all future US FRB's policies concerning digital money.

Business Notes for Startups Founders:

political climate: indifferent;
economic climate: not friendly;
regions to focus: locally;
industries to focus: e-services (tourism);
major limitations: GDP is less than $300 million, population is around 100 thousands, low-income consumers (per-capita less than $2500), high inequality rate (Gini more than 60.0), underdeveloped infrastructure (fixed Internet penetration rate around 30%), high administrative barriers to SME;
stimulus: affiliation with USA, low competition;
opportunities: to launch a mobile e-business aimed at the local international tourists market.
Cryptocurrencies and ICOs (outlook): legal (moderately negative).