Today, we live in the matrix of a virtual world immersed in digital technology. People across the globe cannot imagine their daily life without being online. With the pandemic, the dependency on technology and the internet has increased with businesses, education, and social events taking place in an online environment. We work differently, study differently, shop differently, and even socialize differently sitting in any part of the world. Naturally, the way we use our money is also changing. Economies of many world powers are becoming cashless, as cryptocurrencies like Bitcoin quickly replace governments' traditional money. High-net-worth individuals are primarily looking to invest and trade in cryptocurrency. A significant section of this population can be found in the Middle East in countries like the UAE and Nigeria, which are not cryptocurrency-friendly. These individuals have taken to Citizenship or Residency by Investment to gain a more accessible route to the crypto trade. Let's understand this phenomenon by first understanding what is cryptocurrency in the first place.
Understanding Cryptocurrency
Cryptocurrency is a medium of exchange designed as binary data. It is a decentralized digital currency based on blockchain technology secured by a code that makes it difficult to counterfeit or double-spend. This currency is not issued by any central authority and is out of government control. Therefore, this virtual currency is free from government manipulation and is gaining immense popularity internationally due to its transparency and profitability. Cryptocurrencies like Bitcoin, Ethereum, Tether and Ripple serve the same purpose as regular money and purchase commodities and services digitally. The difference here is that apart from the digital nature, cryptocurrency doesn't have a physical form.
Cryptocurrency and CBI
With the upsurge of this digital investment option, more individuals are becoming cryptocurrency holders and looking at lucrative opportunities to migrate to countries that support this investment. Trading in digital assets, especially amongst the business class individuals, has thus led to an increase in the demand for CBI (Citizenship by Investment) and RBI (Residency by Investment). Countries like Malta and Portugal are encouraging cryptocurrency investments by offering tax exemptions, opening Bitcoin ATMs, and encouraging crypto businesses by offering CBI options with favourable trade and tax policies. Countries like Vanuatu allow CBI applicants to invest in assets using cryptocurrency to qualify for its Citizenship by Investments programs.
Benefits of Crypto investment for CBI
The digital nature of cryptocurrency comes with lucrative benefits making it the apparent currency of the future. Let's look closely at some of its top benefits -
- Accessibility Cryptocurrency is virtually stored, managed, and invested instead of physical notes and coins, making it accessible digitally on computers, tablets, and mobile phones via a web browser or app. This means that a person can instantly use his funds from anywhere in the world, with more businesses and countries adopting this as a legitimate mode of payment.
- Lower Transaction Fee Moving money is more straightforward with no middlemen involved like banks or third-party organizations, resulting in lower transaction fees when dealing with cryptocurrency. Payments are made or received directly and hassle-free.
- Instant Transfer Cryptocurrency is fast, and payments are made instantly through digital wallets without requiring funds clearance through a bank. Crypto keeps up with the fast pace of the virtual world.
- Safety Against Fraud Cryptocurrencies like Bitcoin are developed with a secure technology that is almost impossible to compromise, and their networks come with high levels of transparency and security. This is one of the primary reasons cryptocurrencies receive high praise and hype as individuals feel safer about their funds.
As more and more countries accept this new-age currency, business investors are looking at CBI and RBI as the new norm to expand their crypto trade by securing residence in such countries.
