Cryptocurrencies will not be used to purchase citizenship through the Individual Investor Programme (IIP), a spokesperson from the Parliamentary Secretariat for Financial Services has told The Malta Independent on Sunday.
The Citizenship by Investment (CBI) Index published by the Financial Times raised concerns that Malta's intention to be at the frontline of blockchain technology could result in programme agents accepting cryptocurrencies and converting them into legal tender for purposes of fee payment, especially given that a May 2018 survey found that out of more than 600 high net worth respondents, 35 per cent had already gained exposure to cryptocurrency or intended to gain such exposure by the end of the year.
Malta has become a trailblazer in both sectors, with three cryptocurrency and blockchain bills - the Virtual Financial Assets Act, the Malta Digital Innovation Authority Act, and the Technology Arrangements and Services Bill. They were approved by Parliament at their second reading, with a blockchain and cryptocurrency stock exchange being launched in the country.
Asked whether cryptocurrencies will be used in IIP purchases and if the Ministry was looking to improve its due diligence process to deal with these types of requests, the spokespersons said: "As explained at length during the parliamentary debate, which is publicly available, Malta is neither issuing its own cryptocurrency, nor making cryptocurrency legal tender. This fact is well known to the operators and investors being attracted as a result of the new framework."
It should be noted that the same report did rank Malta first, along with Antigua and Barbuda, Dominica, and St Kitts and Nevis, when it came to due diligence. For example, Malta bars any applicant who, without being able to demonstrate special circumstances, "has been denied a visa to a country with which Malta has visa-free travel arrangements". The country also insists on applicants establishing a 'genuine link to the state' through a one-year residency requirement.
In the concluding remarks of the index, which ranked Malta eight out of 13 countries (Antigua and Barbuda, Austria, Bulgaria, Cambodia, Cyprus, Dominica, Grenada, Jordan, Malta, St Kitts and Nevis, St Lucia, Turkey, and Vanuatu), it found that Malta had low scores "as a result of its comparatively high investment requirements, travel and residence requirements, processing times, and the reputational damage suffered as a result of its programme being singled out for investigations by global anti-corruption groups".