The small Central American state of Belize can be a market to buy foreign currency, but the small size of the nation and the potential volatility of its trading market means that traders require a license to practice forex trading there. It is not difficult to obtain a Belize forex license, although it usually costs around a hundred thousand USD to obtain.
One reason for the license is that the Belize Dollar serves a very small economy that is only worth about two billion dollars. It is possible to trade in the Belize dollar and to bet it against other currencies, but the limited quantity of the Belize dollar, serving a population of less than half a million, means that speculation could damage supply.
There are several factors that make the Belize dollar interesting. The first is that it is pegged to the United States Dollar. This means that it is always worth an American buck in spite of supply. This makes the currency attractive to both criminals and regional investors. Belize allows foreigners to own bank accounts, which is useful for both legitimate business and money laundering.
The peg means that the Belize dollar could easily be worthless or more than the United States dollar and the small country would be bound to honor its promise to the dollar. Its power to do so is limited because the local government tends to overspend its native currency, which creates the potential for oversupply. This does not diminish the demand for the Belize dollar because many foreign traders are currently willing to hold it.
The local economy has several major commodities that help to maintain the value of its currency in spite of excess printing. The most important is oil, and this commodity is generally transacted in United States dollars throughout the world. This means that Belize has a constant inflow of US dollars and needs to coordinate its own currency.
Other commodities that help to bring in dollars and foreign currency are sugar, bananas, minerals, and offshore crustacean fishing. This means that there is abundant opportunity for foreign exchanged trading in Belize because of the number of exports to major economies.
Foreigners are encouraged to set up local bank accounts and to buy Belize forex license. The local government touts increased regulation of its currency market to match global banking norms, but the local forex market is much more liberal than many other regulated markets. The license is needed to open a foreign account, which is another major incentive for having it. The license is renewed every year for a fee that is substantially less than the initial purchase price.