Saint Lucia and Cryptocurrency

Saint Lucia Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology

Saint Lucia has not yet produced regulations specifically concerning cryptocurrency. But, Saint Lucia enlisted for the ECCB pilot program. The program’s goal is to use cryptocurrency to create a digital fiat currency. The Eastern Caribbean Central Bank (ECCB) is the monetary authority for the Eastern Caribbean Currency Union (ECCU). The Union consists of eight islands, including: Anguilla; Antigua and Barbuda; the Commonwealth of Dominica; Grenada, Montserrat; Saint Kitts and Nevis; Saint Lucia; and Saint Vincent and the Grenadines. The official currency of the Union is the Eastern Caribbean dollar. If the program is successful, then citizens of ECCU countries can pay for goods and services with digital Eastern Caribbean dollars or physical Eastern Caribbean dollars.

In 2018, the ECCU initiated a pilot program when they signed a contract with the fin-tech company Bitt Inc (“Bitt). Specifically, Bitt and the ECCU legally obligated themselves to one another when they signed a memorandum of understanding to coordinate efforts for the creation of a digital version of the EC dollar (DXCD). In other words, the pilot is experimenting with the application of digital currency as a governmental legal tender. Accordingly, the DXCD is unlike other cryptocurrencies that are decentralized and not backed by government entities. The DXCD will be distributed by licensed financial institutions and non-bank institutions within the ECCU. The DXCD facilitates financial transactions between consumers and merchants, and also peer-to-peer transactions. To illustrate, someone in Saint Lucia can send a DXCD securely from their smartphone to a friend on another island in a matter of seconds and with no transaction fees.

According to the CEO of Bitt, the pilot program aims to use blockchain technology to “solve persistent financial problems” and enhance the “economic growth and the quality of life of ordinary people.” The Governor of the ECCB, Timothy N.J. Antoine, dictated that the DXCD is the world’s first digital legal tender that is issued by a central bank through blockchain technology. If successful, the pilot will empower residents of Saint Lucia to use a governmental-sponsored cryptocurrency as a means of payment. In the ECCU, these means include cash, debit cards, credit cards, and digital currency. Unlike debit and credit cards, the DXCD will not be subject to transaction fees. The agreement aims to “reduce cash usage in the ECCU by 50%, promote greater financial sector stability, and expedite the growth and development of countries within the ECCU.”

There are many points of focus for the program. The program focuses on “data management, compliance, and transaction monitoring system for Know Your Customer, Anti-Money Laundering, and Combating the Financing of Terrorism.” The project is focused on the development of a secure, resilient, digital payment, and settlement platform that complies with regional and global compliance requirements. The program allows the Eastern Caribbean Dollar to be issued as physical cash as well as in a digital form.

P.S. Insights on Cryptocurrency Legal Issues

Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.

Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.

However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.

Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency.  The globe below provides links to country-by-country summaries:

Podcast:

The Freeman Law Project – Cryptocurrency Regulation and Taxation: A Brief Primer

Is cryptocurrency legal in Saint Lucia?

Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.


[1] Staff Writer, Saint Lucia Taking Part In Digital Currency Project. St. Lucia Times News, (2019, July 21), https://stluciatimes.com/saint-lucia-taking-part-in-digital-currency-project/

 

[2] Staff Writer, Opening a Cryptocurrency Exchange in St.Lucia. Escape Artist, (2018, September 21),https://www.escapeartist.com/blog/opening-a-cryptocurrency-exchange-in-st-lucia/#:~:text=Although%20St.,alongside%20the%20country’s%20national%20currency.

 

[3] ECCB to Issue World’s First Blockchain-based Digital Currency |  Eastern Caribbean Central Bank, Eccb-Centralbank.org, 2019, https://www.eccb-centralbank.org/news/view/eccb-to-issue-worldas-first-blockchain-based-digital-currency

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