El Salvador’s Crypto-Loving President’s New Gamble: Citizenship For Foreign Investors

Topline

El Salvador’s President Nayib Bukele said in a Sunday tweet he plans to introduce a series of reforms including offering citizenships to foreign investors, another step for the populist leader’s plan to bolster the country’s economy by attracting nontraditional capital amid criticism his initiatives will destabilize El Salvador.

Key Facts

Bukele tweeted early Sunday he’s sending 52 legal reforms to El Salvador’s congress, including offering “citizenship in exchange for investments,” saying his plan will “create a haven for freedom.”

Bukele, whose embrace of bitcoin has made him a social media star but controversial internationally, has received more than 42,000 likes on his tweet.

El Salvador would become one of the first countries to offer citizenship to foreign investors, joining Turkey, Malta and several other countries mostly in the Caribbean, according to U.K.-based citizenship consultancy Henley & Partners, which pegs the minimum investment to obtain a passport in those countries in the hundreds of thousands of U.S. dollars.

Key Background

Bukele’s Sunday tweet isn’t his first promise to offer citizenship to foreign investors, as he said last year El Salvador plans to offer fast-tracked citizenship to investors that invest in the country’s proposed bitcoin fund. In September, El Salvador became the first country to recognize bitcoin as a legally recognized currency when Bukele announced it will join the US Dollar as the country’s only legal tender. This decision drew the ire of the International Monetary Fund, whose board of directors urged Bukele to reverse his decision last month, saying bitcoin’s legal status leads to financial instability. The U.S. Senate’s Committee on Foreign Relations introduced legislation last week calling on the U.S. State Department to investigate bitcoin’s legal recognition in El Salvador. Sen. Bill Cassidy (R-La.) said last week bitcoin adoption “opens the door for money laundering cartels and undermines U.S. interests,” prompting Bukele to tell the U.S. it has “0 jurisdiction” to govern El Salvador in a tweet.

Big Number

1,801. That’s how many bitcoins El Salvador owns, Bloomberg reported last month after Bukele announced he purchased $15 million worth of bitcoin with state funds. El Salvador’s total bitcoin holdings are worth $69 million.

Further Reading

‘We Just Bought The Dip’: El Salvador President Boasts Of Doubling Down On Bitcoin As Price Drops (Forbes)

El Salvador Buys $15 Million Worth Of Bitcoin ‘Really Cheap,’ President Crows, As Selloff Continues (Forbes)

Bukele to propose granting Salvadoran citizenship to foreign investors (Reuters)