Buying a second passport with cryptocurrency is getting easier

Buying a second passport with cryptocurrency is getting easier

6th March 2024

Global citizenship by investment programs are turning more accepting of cryptocurrency pay


More countries have opened up residency and citizenship programs backed by investments to cryptocurrency. Investors will however have to factor in higher investment ceilings and scrutiny to be eligible for these.

In the evolving landscape of cryptocurrency, a notable trend is capturing the global community’s attention — the increasing interest of crypto investors in ‘Citizenship by Investment’ programs. Lately, crypto enthusiasts are going beyond the digital realm of blockchain, and exploring diverse citizenship portfolios.

According to the Crypto Wealth Report, 88,200 individuals have amassed fortunes through cryptocurrency, and among them, 182 are considered centi-millionaires, indicating that they possess over $100 million in crypto holdings. Many crypto investors are exploring residency and citizenship by investment programs as a contingency plan, valuing the benefits such as travel freedom and privileges associated with acquiring a second passport in exchange for a capital transfer of at least $100,000 for the lowest cost program.

Reports suggest that those who have made a fortune from cryptocurrency investments and business professionals who strongly believe that crypto will positively impact their businesses in the future have contributed to an influx of inquiries for second passports in 2023.

Crypto-driven citizenship portfolios

Favourable tax laws, opportunity costs, and the growing uncertainty regarding crypto legislation in countries such as the US are just a few reasons crypto millionaires seek second citizenship. They are driven by the escalating restrictions on crypto trading and the implementation of stringent fiscal policies imposing taxes on digital assets at their origin.

Crypto-driven citizenship portfolios are emerging as a novel investment strategy, extending beyond traditional financial instruments. Investors are strategically leveraging their digital assets to acquire citizenship in diverse global jurisdictions, from the Caribbean to the historical landscapes of Europe.

This trend signifies a departure from conventional norms, fostering a new era of borderless identity for those immersed in crypto.

Inclusive regulatory landscape

This is also because many governments worldwide are rolling out more attractive and inclusive regulatory programmes surrounding cryptocurrency.

To date, Caribbean countries including St. Kitts & Nevis, Dominica, Grenada, Antigua and Saint Lucia are the most-friendly to cryptocurrency accepting it as a proof of source of funds for their CBI programs where the most cost-effective program for a single application requires at least $100,000. Most of these countries cannot directly accept bitcoins as a form of payment; instead, a conversion to FIAT currency is a prerequisite which can be done through digital assets management companies.

Grenada accepts cryptocurrency account statement as proof of source of funds from any assets platform with the exclusion of Binance.

Investors can obtain Vanuatu citizenship for a minimum contribution of $130,000. They can provide cryptocurrency as asset proof and pay with crypto through some agents with a 5 per cent processing fee. The government does not accept payments through crypto directly to date.

In 2018, Antigua and Barbuda announced that the government would use Bitcoin legally as a form of payment in the Citizenship by Investment Program however, this initiative did not come to fruition. Investors can obtain Antigua’s passport by paying $130,000 for up to a family of 4.

Although, St. Kitts and Nevis has not officially accepted cryptocurrency as a form of payment for its citizenship by investment program; it has passed legislation supporting virtual or digital assets and digital currency exchanges and investors can use this as proof of funds confirming they have at least $250,000 to cover the investment.

Singapore and Switzerland rank as the top jurisdictions with the most favourable crypto-friendly residency programs worldwide where the minimum investment starts at $550,000, approaching taxing cryptocurrency-related activities – including transactions, mining, staking rewards, and no capital gains – in a highly efficient manner.

El Salvador has also made waves since making Bitcoin a national currency in 2021. More recently, El Salvador, unveiled the ‘Adopting El Salvador Freedom Visa Program’, requiring deposit in Bitcoin or USDT worth $1 million towards visa and citizenship.

Global mobility

The marriage of cryptocurrency and Citizenship by Investment introduces a technological revolution. Blockchain technology, the backbone of cryptocurrencies, is seamlessly integrated into the CBI landscape. Smart contracts and decentralised identity solutions streamline application and verification processes, ensuring efficiency, security, and transparency for crypto investors navigating the complexities of acquiring secondary citizenship.

Many of these individuals seek geographical diversification, and the freedom to establish residence in countries aligning with their lifestyle and business preferences. With newfound citizenship options, crypto enthusiasts gain enhanced flexibility for international travel, business expansion, and lifestyle choices.

This surge in global mobility empowers individual investors and contributes to the economic landscapes of the countries involved, creating a symbiotic relationship between the crypto and real-world economies. This shift reflects a broader desire for decentralised citizenship portfolios that mirror the decentralised nature of cryptocurrencies.

Challenges and opportunities

While the convergence of crypto investments and residency and citizenship by investment programs opens new avenues, it also presents challenges.

Regulatory considerations, including anti-money laundering (AML) compliance and the inherent volatility of crypto assets, demand careful navigation. Governments and industry stakeholders are actively addressing these challenges to strike a balance between fostering innovation and maintaining prudent oversight.

Driven by the desire for autonomy, diversification, and expanded global mobility, crypto investors are reshaping the landscape of international citizenship portfolios.

Inigo De Luna

The writer is Managing Partner, Citizenship Invest.

Source - Gulf News