Date
24 November 2017
Champagne Beach in Vanuatu. Many people in Hong Kong may have heard of Vanuatu through a TV commercial (inset) promoting immigration to the country by investment. Photos: Wikimedia Commons/YouTube
Champagne Beach in Vanuatu. Many people in Hong Kong may have heard of Vanuatu through a TV commercial (inset) promoting immigration to the country by investment. Photos: Wikimedia Commons/YouTube

The ‘bitcoin revolution’ of Vanuatu

Last week I discussed how the tiny Baltic state of Estonia has become the world’s pioneer in promoting “virtual residency” and a state-sponsored cryptocurrency known as the “Estcoin”.

The “e-Residency” program and the “Estcoin” launched by Estonia might appear ahead of their time. However, there is actually another country halfway across the world which has proven even more aggressive in riding the global virtual currency tide, and that is Vanuatu, an island nation in the South Pacific Ocean.

Many people in Hong Kong may have heard of Vanuatu through a TV commercial promoting immigration to the country by investment. The commercial was a big hit in the city several years ago.

Cash-flush mainland Chinese were among those queuing up for Vanuatu citizenship; they wanted to use the country as a shortcut to acquiring Hong Kong permanent residency.

Recently Vanuatu has taken one step further by accepting bitcoin as a medium of transaction from investor visa applicants.

Under its new program, any immigrant investor who has made a minimum investment of US$200,000 worth of bitcoins, or around 43 to 44 bitcoins based on the current conversion rate, can gain Vanuatu citizenship.

The program is highly appealing to investors around the world, not only because the island country is a tax haven in its own right, but also because Vanuatu passport holders are entitled to visa-free treatment in 26 European countries (with the exception of Ireland and the United Kingdom) under the Schengen Agreement.

It remains to be seen whether the “bitcoin for citizenship” program pioneered by Vanuatu would set a new trend for the rest of the world in the short run.

But it is very likely that the program will prompt other small Pacific, African and Latin American countries such as Gambia and Guinea-Bissau, which are also global hotspots for immigrant investors, to launch similar initiatives in order to compete for clients.

Although fundraising through initial coin offering has been banned by South Korea and China, the “bitcoin revolution” initiated by Vanuatu has already opened a Pandora’s box, and no one can put the genie back in the bottle again.

This article appeared in the Hong Kong Economic Journal on Oct. 20

Translation by Alan Lee

Note: Information about Vanuatu’s “bitcoin for citizenship” program in this story came from financial news outlets such as Bloomberg and Fortune. Meanwhile, other sources say the “bitcoin for citizenship” program is not recognized by the Vanuatu government.

[Chinese version 中文版]

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JC/CG

Associate professor and director of Global Studies Programme, Faculty of Social Science, at the Chinese University of Hong Kong; Lead Writer (Global) at the Hong Kong Economic Journal

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