Embracing Evolution: Antigua and Barbuda’s Usage Of Digital Currency

Written by
Patrick Peters, CPA, CA
Published on
Jun 28, 2022
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~4 min read

Patrick Peters, CPA, CA

CEO

As an immigration professional or applicant, if you have ever dealt with the Caribbean Citizenship by Investment Programs (CIPs), you have most likely experienced the delays in transferring funds to these countries.

The root cause of these wire transfer delays in smaller economies is “de-risking”, which is defined by the US Department of State as “the phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk.”

Simply put, the risk of being inadvertently involved in the movement of illicit funds is being subject to an immense fine.

This is all about the Correspondent Banking Relationships (CBR) - if a US correspondent bank deems one beneficiary bank as unacceptably risky, it is easier and more cost-effective to terminate their CBR with that beneficiary bank instead of managing the risk. Here is a comprehensive IMF Working Paper on this topic.

In the Caribbean CIP nations, there are very few banks to begin with, and even fewer banks accept funds related to the CIPs. If any of these banks lose their CBRs, they could not receive US dollars, which would be devastating to the economic wellbeing of the country. For that reason, those few key banks have to protect their CBRs with all their might.

This has translated into each bank conducting extensive AML/KYC compliance work on every single CIP-related transaction. This detailed work then creates a backlog in the money movement department and tacks on additional banking due diligence fees.

As we always strive to ensure our partners and their clients have a positive experience, we have always been able to find ways to eliminate or reduce these processing times and fees. However, Antigua and Barbuda’s PM Gaston Browne is fighting very hard to find permanent solutions to what he calls “unfair treatment of smaller economies”.

Prime Minister of Antigua and Barbuda, the Hon, Gaston Browne (r) and United States Congresswoman, Maxine Waters.
Prime Minister of Antigua and Barbuda, the Hon, Gaston Browne (r) and United States Congresswoman, Maxine Waters. Credit: https://today.caricom.org/2021/03/08/pm-browne-latest-development-on-de-risking-a-major-victory-for-caribbean/

Digital Assets Business Bill

In 2020, Antigua and Barbuda passed into law a Digital Assets Business Bill, which creates a regulatory framework for digital asset businesses and consumers.

This Bill is sure to pave the way for businesses who want to leverage digital currency and blockchain technology, such as those who wish to issue or sell digital currency, and even help make the technology more widespread from a consumer standpoint.

Bitcoin Cash in Antigua

I was in Antigua very recently and was pleasantly surprised to see so many businesses accepting Bitcoin Cash (BCH). One restaurant owner told me “It’s amazing; a person just pulls out their phone, the code is scanned, and my BCH account is credited. Once a month I receive the funds in local currency, just like I would with the local credit card service providers.”

BitcoinCash Accepted Here

You can read an interesting article here about the widespread use of BCH and its positive impact on local businesses and consumers. Antigua and Barbuda is truly one of the leading nations on digital currency and it’s a testament to their willingness to find solutions to problems as they arise.

Imminent Improved Money Movement - CIU

The Antigua and Barbuda Citizenship by Investment Unit (CIU) continues to work towards identifying and implementing additional solutions for receiving funds for the programme. Mrs. Charmaine Quinland-Donovan recently told me “My team and I regularly interface with our domestic banking partners to ensure timely processing and release of incoming funds. We are hoping to soon have an announcement that will further enhance the ease with which the financial transactions related to the investment migration applications are concluded.”

Islands along coast with boats in water

Improved Money Movement – CIP Service Providers

It has also become apparent that CIP service providers are becoming more and more “open for business” when it comes to digital currency. We here at ClientReferrals, along with some of our promoting partners, are exploring (or already accepting) digital currency as a form of payment.

Antigua and Barbuda has become the program of choice for the so-called “Bitcoin millionaires”, and it makes sense. The country has taken concrete steps to become “digital asset-friendly” and applicants are taking notice. We have seen an influx of applicants whose net worth have been significantly generated by taking risks and investing early in the various crypto currencies.

The Best is Yet to Come!

One of the main reasons that explain the incredible growth of Caribbean CIPs is the great simplicity of these programs. Although sending money to smaller nations has become more difficult in recent years, Antigua and Barbuda’s astute leadership are ensuring the program’s prosperity and ease of use for all parties involved will continue well into the future. We are witnessing a truly fascinating phenomenon – the birth of a money revolution, where technologies and systems are evolving toward a more user-friendly experience.