On Dec. 21, the Salvadoran unicameral legislature, dominated by President Nayib Bukele‘s New Ideas party, voted in favor of the new citizenship law. Conducted during a late-night session, the vote garnered significant support, paving the way for the swift enactment of the policy.
New Citizenship Law for Bitcoin Investors
The newly approved law grants expedited citizenship to foreign investors who make Bitcoin “donations” towards El Salvador’s social and economic development programs. This approach is part of a broader strategy to attract foreign investment and bolster the nation’s economy. The law notably omits a minimum donation requirement, making it accessible to a wide range of investors.
Furthermore, the law simplifies the naturalization process for non-Spanish-speaking investors, waiving the typical five-year residency requirement. Instead, individuals who invest in Bitcoin can gain citizenship more rapidly, a move that aligns with El Salvador’s pioneering adoption of Bitcoin as legal tender in 2021.
The reform emphasizes the significance of President Bukele’s development initiatives, specifically mentioning the role of “altruistic foreigners interested in supporting the economic, social and cultural development of El Salvador … by donating bitcoin.”
El Salvador Sees Financial Gains from Bitcoin Investments
On Dec. 4, President Bukele announced that El Salvador’s Bitcoin strategy has paid off, with the nation realizing a profit of $3.6 million. This profit comes as Bitcoin’s price surged above El Salvador’s average purchase price, marking a significant turnaround from previously reported paper losses.
“Our BTC investments are in the black!” announced President Bukele in a post.
El Salvador’s #Bitcoin investments are in the black!
After literally thousands of articles and hit pieces that ridiculed our supposed losses, all of which were calculated based on #Bitcoin’s market price at the time…
— Nayib Bukele (@nayibbukele) December 4, 2023
President Bukele has made it clear that despite the current profits, El Salvador has no plans to liquidate its Bitcoin holdings. Emphasizing a long-term strategy, Bukele said, “We have no intention of selling… that has never been our objective.”
The pioneering move to adopt Bitcoin as legal tender in 2021 reflects Bukele’s vision of leveraging cryptocurrency for economic growth and autonomy. With Bitcoin’s integration into the country’s economy, Bukele envisions a future where El Salvador, and potentially other South American nations, can lessen their reliance on traditional, inflation-susceptible currencies like the U.S. dollar.