The UK's various immigration routes ordinarily contain a financial requirement which must be met as part of an applicant’s general eligibility criteria. Bank statements from regulated financial institutions are the most common means of proving funds for students, workers, and visitors, but the emergence of cryptocurrencies in the past few years has changed how some people choose to hold their assets. Cryptocurrency is seen as an alternative store of value and one which many believe is well-placed in a diverse and forward-thinking investment portfolio. Over the next few years, it is not unlikely that an increasing number of applicants will want to know whether their crypto investments can be wholly or partially accepted by UKVI to meet the specific financial requirements of their visa. This post will explain what cryptocurrency is, whether it is regulated in the UK, and if it can be relied on as part of your immigration application.
What is Cryptocurrency?
Background
On 31st October 2008, the Bitcoin white paper was published by a pseudonymous developer named Satoshi Nakomoto. The paper proposed a decentralised, peer-to-peer electronic cash system which would rely on cryptographic proof, instead of trust, for transactions conducted on its network. Transactions would be recorded in blocks of data on a distributed ledger, known as a blockchain. With each block containing an average of 2,000 transactions, once the block size limit is reached, the next block would automatically follow sequentially, linking the blocks together. The decentralised nature of the protocol would make it impossible to change a block or to interfere with past blocks. Decentralisation would also remove entirely the need for third-party intermediaries - such as banks or payment platforms like Visa or Mastercard - and would provide everyone with full custody and sovereignty of their assets. Bitcoin could be sent from one randomly generated "address" (account) to another, much like the conventional method of banking, but with the benefit of anonymity and without undesirable fees and delays. This revolutionary proposal was built on the earlier works of cryptographers (or "Cypherpunks") including David Chaum's "DigiCash", Adam Back's "HashCash", Nick Szabo's "Bit Gold", Wei Dai's "B-Money", and Hal Finney's "Reusable Proof of Work". On 3rd January 2009, the Bitcoin protocol launched, and the first block was created - known as the "genesis block". Within it contained a message quoting a headline from The Times newspaper. It read:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
Many see this quote as a philosophical message underpinning the need for Bitcoin, whereas others consider it a timestamp verifying the date on which the network launched. In any event, Bitcoin has since developed into a network used by millions of people worldwide. Up to now, there have been close to 1 billion transactions in total. It operates as a system independent of any central authority and one which issues and validates transactions securely via the use of tens of thousands of "nodes" which maintain the network's integrity by validating blocks. Bitcoin has become for its users a trusted store of value and mechanism for monetary exchange, just as its anonymous creator envisioned in 2008. At the time of writing, Bitcoin has a market capitalisation of around £1 trillion. With a pre-designed maximum circulating supply of 21,000,000 coins, each person in the world would only have around 0.0026 Bitcoin if they were evenly distributed.
Alternative Cryptocurrencies
Countless new cryptocurrencies (known as "alt-coins") have emerged in the years following the advent of Bitcoin. While some of them have proposed and implemented innovative use cases which may ultimately transform the business, finance and energy sectors in the long-term, most of them have served to take advantage of inexperienced and uninformed investors who end up losing their money. This has often been the case due to the people behind these other cryptocurrency projects serving as the central entity in control of a large portion of the network's coins and either abandoning the project and/or manipulating the coin's market price with a sudden, high volume sell off (known as a "rug-pull"). This is one of many prominent risks to a centralised network, others being unethical network manipulation and network security breaches.
Is Cryptocurrency Regulated in the UK?
Cryptocurrency is not currently regulated in the UK. The Financial Conduct Authority (FCA) is the main regulatory body for financial matters in the UK. It oversees financial firms offering services to retail and wholesale consumers. Although its purview covers anti-money laundering and other criminal activities related to firms in the crypto and cryptocurrency sector, the FCA does not regulate cryptocurrencies as a product. In practice this means firms have in recent times had to increase their due diligence and onboarding checks (KYC) to comply with regulations. Furthermore, the UK Advertising Standards Agency (ASA) has tightened restrictions for consumer-advertised cryptocurrency and services, requiring promotional material to be clear, fair and not misleading, as well as making consumers aware of the risks involved with cryptocurrency investment.
Can Cryptocurrency be used to meet the Financial Requirements of a UK Visa Application?
Countries in which Bitcoin is Legal Tender
As of March 2024, only two countries officially recognise Bitcoin as a form of legal tender: El Salvador and the Central African Republic. This means these countries permit the use of Bitcoin to discharge debts, pay for goods and services, and to pay taxes. Most countries do not prohibit the use of Bitcoin or other cryptocurrency, and only a handful of countries have imposed a blanket ban. As Bitcoin becomes more widely adopted worldwide, the likelihood of more countries accepting it as a form of money increases. With that comes the question of how such funds might be treated by UKVI for the purposes of considering an immigration application. The official 'Financial Requirement' staff guidance (Version 7.0 - published on 01 December 2023) states the following on p.38:
Where money is held in one or more foreign currencies, this must be converted into pound sterling (£), normally using the spot exchange rate which appears on www.oanda.com for the date of the application.
In countries where Bitcoin or other cryptocurrency is accepted as legal tender, applicants could arguably have the right to rely on income, savings or investments held in that form. Such funds could be verified in the same way by UKVI using its preferred exchange platform, as seen below:
This would be the most straightforward way in which an applicant could demonstrate meeting the financial requirements of their immigration route, although we are not aware of instances where a client has attempted to do this.
Currently, the acceptable types of funds must meet the following rules listed on p.40:
held in a financial institution that uses electronic record keeping, which is regulated by the appropriate regulatory body for the country it is operating in and where UKVI can make satisfactory verification checks.
held in an account belonging to the applicant or their partner (who is applying for permission at the same time or has been granted permission)
According to a PwC report on El Salvador's introduction of Bitcoin in 2021, the Government provided its people with an electronic wallet called "Chivo" to allow easy access to and custody of Bitcoin without commission. The wallet also doubles as an Exchanger. It would not be unthinkable, then, for an applicant in El Salvador to argue that Chivo meets all of the criteria set out above. The argument may extend to nationals of other countries where Bitcoin and cryptocurrency is not legal tender, but is held in a reputable financial institution regulated by that country's regulatory body.
Student Visas
The financial requirements an applicant will have to meet differ depending on their particular immigration route. As of March 2024, there is no mention of crypto, cryptocurrency, or crypto assets anywhere in the UK's Immigration Rules. That said, the term "Bitcoin" features in the online versions of UKVI's guidance for 'Financial evidence for Student and Child Student route applicants' (last updated 05 August 2022) and 'Financial evidence for sponsored or endorsed work routes' (last updated 22 August 2022). Under the subheading of the types of funds not accepted, it states:
The following are not accepted as evidence to show you have the required amount of money:
overdrafts
bitcoin savings
stocks and shares
pensions
bank accounts that are not regulated by the financial regulatory body in the country in which the bank operates
bank accounts that don’t use electronic record keeping
Interestingly, this restriction on Bitcoin savings for the purposes of meeting the financial requirements of the student, child student and sponsored work visa routes does not appear on the Home Office's official 'Student and Child Student' staff guidance (Version 5.0 - published on 05 October 2023) or the official 'Financial Requirement' staff guidance (Version 7.0 - published on 01 December 2023) - the latter being applicable to 27 other immigration routes, including skilled workers, innovator founders, and high potential individuals. By contrast, HM Revenue & Customs (a non-ministerial UK body responsible for the collection of tax in the UK) has had in place guidance relating to cryptocurrencies since 2018.
Family visas
The recent changes to the financial threshold for family visas will see a rise from £18,600 to £38,700, with two intermediate increases between Spring 2024 and early-2025. There are currently 5 ways for applicants to meet this threshold, these include:
income from salaried or non-salaried employment of the partner (and/or the applicant if they are in the UK with permission to work) - Category A or Category B, depending on the employment history.
non-employment income, for example, income from property rental or dividends from shares - Category C.
• cash savings of the applicant’s partner and/or the applicant, above £16,000, held by the partner and/or the applicant for at least 6 months and under their control - Category D
• state (UK or foreign), occupational or private pension of the applicant’s partner and/or the applicant - Category E
• income from self-employment, and income as a director or employee of a specified limited company in the UK, of the partner (and/or the applicant if they are in the UK with permission to work) - Category F or Category G, depending on which financial year(s) is or are being relied upon
The question remains whether cryptocurrency can safely fit into any of these categories. Again, there is no reference to it in the rules. The closest provisions in place would be Category C: "dividends or other income from investments, stocks and shares, bonds or trust funds" which state that a certificate showing proof of ownership is required:
To evidence dividends...or other income from investments, stocks, shares, bonds or trust funds:
a certificate showing proof of ownership and the amount or amounts of any investment or investments
a portfolio report (for a financial institution regulated by the Financial Conduct Authority (and Prudential Regulation Authority where applicable) in the UK) or a dividend voucher showing the company and person’s details with the person’s net dividend amount and tax credit
personal bank statements for or from the 12-month period prior to the date of application showing that the income relied upon was paid into an account in the name of the person or of the person and their partner jointly - the bank statements should cover the period for which the income is relied upon.
Unlike stocks, shares, and gold, there is no way to prove ownership of cryptocurrency for these purposes by way of a certificate or other official document. There is no central authority or person of authority who yields control. As explained by the New York Digital Investment Group:
"Police enforce laws. Government regulators oversee our financial system, and large institutions can wield outsized influence. The sports that we love all have referees. Even children playing games will scream to their parents if they think someone is cheating. Yet, in our day-to-day lives, there's simply no analog for how Bitcoin works. But it does work. Bitcoin has been chugging along, producing blocks without interruption since it launched in 2009. It stands in defiance of our deeply ingrained belief that someone, anyone, needs to be in control lest there be chaos."
Bitcoin and other cryptocurrencies may be held on an exchange (for example, Coinbase or Binance) or a "hot wallet" (like MetaMask or Exodus) where they can be easily bought, sold and exchanged. On the other hand, a "cold wallet" (such as hardware wallet like the Ledger Nano X) is preferred by those who want more security and full custody of the private keys which grant access to their assets. Note: public keys are akin to account numbers whereas private keys act as the password to your account (they should never be shared).
An applicant could request an official transaction history from a centralised exchange regulated by the FCA, as they might for tax purposes, but it would be difficult for a decision-maker to verify those funds are still held by the applicant if they moved to a different address - as they likely would for those who want to keep custody of their crypto assets. In effect, an official report or transaction history from a centralised exchange would only serve to prove which cryptocurrencies were purchased, on which date, and for what market price. They would not verify that those same assets were held by the applicant at any time after purchase, let alone that they remain under the control of the applicant at the time of application, unless the funds do not move from the exchange by the time the applicant seeks to rely on them.
Taking the above Coinbase transaction report as an example, the applicant could demonstrate that he purchased 0.02 Bitcoin on 02 May 2020 for total price of £200, followed by 0.09 Bitcoin on 07 May 2020 for total price of £750. Altogether, the applicant has approximately 0.11 Bitcoin and could use a number of official exchanges or other reputable platforms to verify the value of his 0.11 Bitcoin on the date of application. The fiat currency value of his Bitcoin would naturally vary depending on when the applicant was applying:
~ £830 on 1st June 2020
~ £2,600 on 1st June 2021
~ £2,200 on 1st June 2022
~ £2,300 on 1st June 2023
~ £5,700 today
The problem arises when we cast our eye to the 'notes' column on the right-hand side. We see the applicant sent 0.02 Bitcoin and 0.09 Bitcoin to different addresses after purchase. These addresses could belong to anyone. Without getting into more technical methods of verifying ownership such as signing a message using private keys, the applicant would have a difficult time establishing continued ownership.
The UK's system of taxation involves a degree of trust placed on individuals to accurately and honestly reflect their financial circumstances when discharging their annual tax obligations. The rules concerning financial documents for immigration purposes arguably carry closer scrutiny. It seems, then, that only the liquidation of a cryptocurrency and subsequent withdrawal of funds from a centralised exchange to a bank account (Category D), or the holding of the cryptocurrency exclusively on a centralised exchange (Category C), could be sufficient to meet the financial requirements under the 'non-employment' category for family visas.
This still leaves uncertainty for applicants who seek to rely on cryptocurrency savings without having to sell them for fiat currency (£, $, € etc.). It also poses questions for the increasing number of applicants whose main or only form of payment is in cryptocurrency like Bitcoin (Category A). The problem of keeping funds on a centralised exchange to prove ownership is contrary to the popular crypto adage "not your keys, not your coins", which speaks to the importance of owning the private keys for full custody of your assets, without the reliance on third-party authorisation. This would be a difficult and unreasonable sacrifice expected of applicants if it were the only way to meet the financial requirements.