Cryptocurrency will be “very important” for overcoming banking issues, lack of progress on harmonization may be due to inertia, and new CIP competition from Europe is ultimately a good thing, Prime Minister Gaston Browne of Antigua & Barbuda told Investment Migration Insider in Davos.
De-risking a “significant threat”
Elaborating on his continued chastisement of the US, EU, and OECD, Browne expressed frustration at the rules policy-makers in developed countries had crafted, noting that they put countries like his own “at a major disadvantage”.
“Even though we’re small island states, our people have a right to live, and our people also have a right to enjoy a good standard of living. And some of the rules that have been introduced in the global space put small island states at a major disadvantage. If we are unable to make payments, or even to receive payments, then clearly our country will be plunged into poverty.”
“De-risking, for example, is perhaps one of the most significant threats facing small island states in the Caribbean.”
Among the proposed solutions to the de-risking/correspondent banking issues have been the expanded use of alternative methods of payment. Last summer, the Antiguan Parliament introduced legislation to pave the way for cryptocurrency payments under the country’s CIP. Interest in that payment mechanism, said Browne, had been underwhelming.
“It’s been very low so far. I think we have not been successful in marketing the program as one that takes cryptocurrencies as a form of payment. But I think that, as more and more investors recognize that we accept cryptocurrencies, the demand will increase. But we also intend to broaden that payment mechanism to accept payments in RMB as well. We’re trying to make it as easy as possible for the investor to make a payment and to work around the issues associated with correspondent banking.”
Responding to a question about what role he thought cryptocurrency could play in helping the region overcome its correspondent banking woes, the PM said it would be “very important”.
“It provides an alternative payment mechanism, it’s cheaper, it’s easier to move and there’s traceability as well,” said PM Browne, who was careful to point out that he also knew the compliance risks associated with the use of cryptocurrency, risks he explained the government had taken into account when drafting the legislation.
“[Accepting payments in cryptocurrencies] also creates an additional market for the CIP; those who operate with cryptocurrencies, they too have the opportunity to invest in our CIP.”
Slow progress on CIP harmonization due to “inertia”
Questioned as to what’s holding up work on Caribbean leaders’ stated goal of deeper integration on due diligence and processing among the region’s CIPs, the Prime Minister re-affirmed his support for the notion.
“I’ve been an ardent proponent for harmonization, especially for the due diligence process. So, I remain hopeful that, very soon, we shall be able to proceed. In fact, I am of the view that [CIP harmonization] should not exclusively be enshrined in policy, but in legislation, to avoid any potential policy abuse,” said Browne.
Pressed about what’s causing the delay in the harmonization process, considering the broad acknowledgement of the need for such among Caribbean leaders, Browne indicated the work on integration had perhaps not received the degree of prioritization it warrants.
“Maybe inertia, to some extent,” commented Browne on what could be the cause of the sluggish progress. “Maybe we need one or two of us to really drive the process. Even though we have spoken about the need for harmonization, the follow-up has been weak.
Welcoming competition from new European CIPs
Asked to share his view of the implications of having new programs in Europe – chiefly Montenegro and Moldova, both of which enter the market at a price point similar to that of Caribbean programs – Browne pointed out that further competition would ultimately be beneficial, both for his own program and for the industry as a whole.
“Well, I think competition is good. Ultimately, it just means we’ll have to improve our product offering. And I believe it will help broaden the global CIP space and give further legitimacy to CIPs. If you only have a handful of countries doing citizenship by investment, then the naysayers will continue to look at these programs as programs for crooks, and their arguments will prevail,” said the PM, explaining that the more jurisdictions that open CIPs, the more accepted the industry would become.