Antigua Observer:– The government’s newly proposed option to allow for the Citizenship by Investment Programme (CIP) to be accessed with Bitcoin Cash and the use of the cryptocurrency, has raised concern about the conversion of the digital currency to cash.
Democratic National Alliance (DNA) spokesperson for telecommunication, information, broadcasting and science, Louis Rivera, highlighted that the investment option includes the use of cryptocurrency, which can only be used in specific online markets. This concern was expressed in an interview on OBSERVER AM yesterday.
According to the proposed CIP option, investors would be able to gain citizenship by investing monies through Bitcoin Cash, which is a large-scale form of Bitcoin.
“My biggest concern would be how the government intends to turn the cryptocurrency they receive into fiat currency,” Rivera said. “Specific places online accept crypto currencies, unless you’re shopping there you are not able to spend it,”
He reasoned that the government would need to convert the funds received by cryptocurrency when it wishes to use the funds, outside of the online markets.
Rivera further stated that converting cryptocurrency to fiat currency, which is legal tender, can be done but is not easy with large amounts.
According to him, cryptocurrency has to be sold for fiat currency, that requires a buyer. “You have to find someone willing to buy it.” He cautioned that finding a buyer to purchase a large quantity of cryptocurrency may pose a problem since “it’s not the most liquid of assets”.
He also highlighted that cryptocurrency is volatile. According to him, this means that the rate at which it is sold is subject to change; the price of the cryptocurrency fluctuates daily.
Although there were initial speculations of money laundering and the association of bitcoin with the “underworld,” Rivera explains that most people involved in the use of Bitcoin Cash are investors or individuals seeking to explore the benefits of the store of value.
He added that the dangers associated with the use of Bitcoin cash are the same as those associated with offshore sectors.
“The biggest problem now is how do we make it liquid,” Rivera reiterated.
A liquid asset is actual cash or an asset that can be readily converted to cash.
Bitcoin is a digital currency created on 2009. It offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralised authority, unlike government-issued currencies (legal tenders).