A common question among expats and investors is whether they can make a real estate investment using Bitcoin or other cryptocurrencies.
Before we proceed, let us give you the answer: Citizenship cannot be obtained by direct investment in cryptocurrency. Although there are rumors that some countries accept Bitcoin for citizenship by investment programs, this is not a confirmed information.
In most countries, digital assets are treated as a commodity and not as currency or cash. This means that you will need to sell your crypto assets first before they can be used to invest in citizenship by investment programs.
Another reason why you should exchange your coins before applying for citizenship by investment is the transactions that you will need to do through banks. You will need to pay the investment fee, as well as other fees, in order to apply for the citizenship program. On the other hand, banks can only take paper money.
Using Bitcoin to Buy Citizenship: Legitimacy
Another concern that arises from cryptocurrency is legality. Even if you decide to sell your coins to apply for citizenship by investment programs, you will need to pass due diligence checks that require you to prove the source of your funds. This means that you will have to prove that you earned this money legally.
You will need to demonstrate the legitimacy of the source of the funds with which you purchased the cryptocurrency. In addition, you will need to show documents about how much you sold it and whether you paid any taxes. In short, having enough money will not be enough to apply for the citizenship program.
Authorities may request additional information and documents as the case may be.
Possibility to buy citizenship with Bitcoin
Several sources have reported that some governments are allowing foreigners to apply for citizenship programs using cryptocurrency. However, this has not been verified. One of these countries is Vanuatu. The state has been reported to be accepting cryptocurrencies as payment for the citizenship by investment program. However, the authorities made an official announcement on the official website and stated that US dollars is the only form of payment accepted.
The same is true of Antigua and Barbuda. The government made an announcement in 2018 and stated that it would accept cryptocurrencies for citizenship by investment applications. However, no implementation has taken place since then.
The future of buying citizenship with Bitcoin
While there is currently no set rule or regulation, it is likely that countries will start accepting cryptocurrency in CIB software applications. Once cryptocurrencies are recognized as payment methods by regulators, this will expand the choices of crypto investors and make the due diligence process easier for them.
We know that Caribbean governments want to improve their reputation in the crypto space and that is why they are working on new regulations to implement the use of cryptocurrencies in money transfer. Regulators in Europe are also trying to integrate cryptocurrencies into the existing banking system.
The good news is that many countries already have good relations with cryptocurrencies. For example, Portugal is crypto-friendly and cryptocurrency transactions are exempted from the country’s value-added tax. There are also many other crypto-friendly countries that offer advantages to cryptocurrency traders. These countries may soon announce that they accept bitcoin or other cryptocurrencies in their citizenship-by-investment program.