Grant of citizenship to cryptocurrency investors

If for any reasons you wish to obtain the foreign citizenship, many states will accommodate your needs in return for investment of your capital to the national economy. This possibility is called «citizenship by investment» (CBI). There is an increasing umber of those who desire to get the «second homeland».

Consequently, new programs of the investment migration appear. There are also appearing new means to pay for such programs. One of these means is the investment in cryptocurrency.

Countries that have low level of economic development are ready to provide the cryprocurrency investors with citizenship in order to increase their national economy at the expense of the foreign capital. However, due to the increased popularity of the Bitcoin and other digital currencies, it became possible to obtain the passport or residence permit for transfer of funds in cryprocurrency in some countries of the EU. The article considers jurisdictions, which are pleased to provide the national passport in exchange for the investment in cryptocurrency.

Why is the cryptocurrency investment attractive?

General advantage of the cryptocurrency as means of payment is absence of control conducted by the central bank of any country.Such decentralization makes cryptocurrencies attractive for the potential investors. There is no risk of limitation of cryptocurrency transaction  by financial authorities of one or other state. As an example, in case legislation of the native country of the investor prohibits its citizens to operate with foreign bank accounts. Thus, when transferring a revenue from the cryptocurrency assets, such person may be subject to significant administrative funds and other penalties. In this case investment in obtaining citizenship is a possibility to avoid restrictions specified hereinabove.

In addition, high speed together with possibility to perform such operations without any intermediaries also makes settlements in cryptocurrency attractive.

Nevertheless, advantage of investment in cryptocurency is also a disadvantage. It is complicated for the person who desires to get a citizenship in return for digital assets to confirm the lawfulness of the received income. The question is how the investor will confirm that the origin of his assets is not related to money laundering and other illegal operations.Other disputable aspect is a possibility to confirm transfer of funds to the state budget if cryptocurrencies are anonymous.

The company Ajax Software LLC assumes that its development, the currency Citizenshipcoin (CTZ), will resolve all issues arising in execution of cryptocurrency transactions. Representatives of the company believe that this digital currency will become the main mean for settlements in operations related to the immigration for investment. Additionally, operations with the CTZ are in accordance with the KYC/AML legislation. Thus, the problem of proving the validity of funds is automatically solved.

Which countries allow to acquire the citizenship for investment in cryptocurrency?

Trends of 2018 have shown the increasing popularity of digital currencies in payment of particular services services. Some states declared their readiness to accept payments in bitcoins and other similar currencies, and prepare relevant bills.

Antigua and Barbuda

Citizenship by Investment informs that in July 2018the government proclaimed its decision to accept in cryptocurrency payments related to obtaining citizenship by investors. In addition,in 2018 representatives of the Cabinet of Ministers have already presented plans to legalize the bitcoin as an official currency to pay for the state services. Thus, digital funds in the state Antigua and Barbuda have a prospect to became the official currency.

Relevant amendments to the legislation were adopted on 23 July 2018. Now potential citizen may make settlements in bitcoins to obtain the passport of a citizen. However, funds obtain in cryptocurrency are subject to the converstion in USD.

Vanuatu

In Autumn 2017 the head of the Vanuatu Information Center Jeffry Bond announced to the local media that the state is ready to provide passports in exchange for bitcoins. Nevertheless, this information was rebutted by representatives of local authorities almost at once. According to their statements, all payments related to investment immigration are still accepted in USD.

In April 2018, the theme of immigration for cryptocurrency investment appeared in mass-media again. According to James Harris, representative of the Vanuatu Information Center, the state has already established the acceptance of investment in cryptocurrency. The mechanism involves connection between representatives of authorities and the potential investor. Authorities notify the concerned person the value of obtaining the passport. The investor has two hours to make a decision and pay the necessary amount in cryptocurrency. In case of successful transaction the investment in digital currency is subject to conversion to USD.

Similar initiatives were also announced by the Government of Saint Lucia. The state authorities are seriously considering the possibility of implementing bitcoin as an instrument for making payments inside the country.

Except islands, intention to use the cryptocurrency as a payment instrument in operations with the economic citizenship should be considered also within the EU.

Local government in Malta has already authorized the placement of automatic teller machines accepting payments in cryptocurrencies. They are expected to be used in the near future, among other things in operations concerning investment immigration.

Due to investment in cryptocurrency, in 2018 it is possibile not only to obtain citizenship, but also to apply for a residence permit. Authorities of Portugalia does not propose to transfer cryptocurrency assets to the state budget. However their program «Golden Visa»provides a possibility to obtain the residence permit in this country in return for the real estate purchase. The state already has precedents when in purchase of the house the equivalent in cryptocurrency has been used instead of EUR.

Prospects for acquiring citizenship for cryptocurrency investors

The «anonymity» of cryptocurrencies and absence of control by authorities make them attractive for money laundering and other unlawful financial operations. That is why number of states prohibits to use digital currency while executing transactions. Authorities of Saint Kitts and Nevis - - the state, where operates one of the oldest programs related to obtaining citizenship by investment. According to government officials, they do not consider bitcoin as the official currency to pay their citizenship by investment programs.

Nevertheless, growing popularity of digital funds, development of the special cryptocurrency Citizenshipcoin and other prerequisites show the opposite direction. It is possible that in the near future cryptocurrency assets will be used to pay for the national passport. More than 60 countries of the world have the automatic teller machines for accepting payments in bitcoins and other digital currencies. It is not beyond the realm of possibility that such currencies will be used in programs providing citizenship for investment.

The company «Migronis» reports that in 2017 there are more than 30 precedents of obtaining citizenship by investment using cryptocurrency assets. Examples hereinabove have shown that cryptocurrencies are frequently used by investors to obtain a citizenship. On the other side, the possibility to transfer cryptocurrency to accounts of treasury departments or other analogous bodies directly without intermediaries is still excluded.