EQIBank, which is taking applications for accounts starting today, is courting customers from the worlds of conventional finance and blockchain, and seems to have a good grasp of both.
“For the first time, customers can manage traditional and crypto assets within a single banking relationship, while accessing a comprehensive suite of services including trading, custody, lending, clearing and settlement,” reads the press release.
So far, so good. It continues:
EQIBank is the first licensed bank to deliver on the potential of blockchain. It provides the most comprehensive financial services ecosystem in the world for anyone looking for a smart, seamless banking experience. For the first time, customers can manage traditional and crypto assets within a single banking relationship.
These things speak to it being a bank that understands the needs of wealthy cryptocurrency holders, and there’s a definite gap in the market for banks that are able to bridge the gap between national currencies and cryptocurrencies.
EQIBank also has an in-house cryptocurrency exchange, offers peer-to-peer loans between clients, and provides vaulting services for digital assets; all things that should endear it to traders and investors alike.
That said, one particular word in the press release signals another benefit of EQIBank which appeals to a certain class of customer:
Semantically the title would make sense without it. So what does the word add?
A clue comes at the end of the release: “EQIBank is an offshore bank and offers banking with no direct taxation.”
Aha. OK then, what exactly is an offshore bank?
In a sense, an offshore bank is an international bank. It services clients and businesses based in countries other than the one in which the bank is located—clients who in turn wish to store their assets in a bank outside their home jurisdiction.
Conveniently, these jurisdictions tend to take a laissez-faire attitude toward taxation of any assets parked there.
EQIBank is based in Dominica in the Caribbean, and advertises the fact that the jurisdiction has no capital gains tax, capital transfer tax, or wealth taxes. Dominica is also known for its “citizenship by investment” program, in which foreigners of any nationality can become a Dominican citizen for the sum of $100,000. (Which seems a lot, until you consider that they are then exempt from income tax on any earnings made outside of Dominica.)
Offshore banking became a huge topic in 2016 after the Panama Papers leak, which exposed a web of shell companies and Panamanian banks used by the super rich to hide their wealth. Amazingly, a 2017 report from the National Bureau of Economic Research estimated that wealth stored in tax havens accounted for the equivalent of 10% of global GDP.
So hypothetically, if you did have a large amount of wealth stored in either fiat or cryptocurrency, an establishment like EQIBank would be well placed to help you keep it away from the grasping claws of the taxman.
Of course, for legal reasons, we should be clear that EQIBank does not advocate tax evasion, and advises all customers to disclose their income to the tax authorities.
Which I’m sure they absolutely will.