Critics argue that the substantial $1 million requirement makes citizenship unattainable for many investors. Comparable citizenship-by-investment programs in the Caribbean start at around $100,000.
The government of El Salvador has introduced an innovative yet controversial program that offers residency and a pathway to full citizenship in exchange for a substantial investment in cryptocurrency. Tagged El Salvador’s “Freedom Visa”, the program requires participants to invest $1 million in either Bitcoin (BTC) or Tether (USDT).
This program has been promoted by the administration of President Nayib Bukele as a way to encourage foreign investment and advance national development. There is a $999 non-refundable deposit required for interested parties, which goes toward the $1 million investment cap. The program is only open to 1,000 investors annually, which means it could bring in $1 billion a year for the Salvadoran government if it is filled.
The administration highlights Bitcoin incentives and technological innovation as reasons why cryptocurrency supporters might find El Salvador appealing. However, critics argue that the substantial $1 million requirement makes citizenship unattainable for many investors. Comparable citizenship-by-investment programs in the Caribbean start at around $100,000, while some European investor programs have lower costs. For instance, Malta offers EU citizenship for $810,000, including various investment options.
Although the program is marketed as a “Freedom Visa”, government officials portray it as more than just a transaction for obtaining passports. They describe it as an invitation for investors to actively participate in shaping El Salvador’s future trajectory. Participants are encouraged to make the country their new home, embracing the Bitcoin lifestyle and the evolving landscape of financial freedom.
The success of the program, with its ambitious promises and high price point, will be determined in the coming months and years. However, the government faces tough competition, especially from cost-conscious investors, as there are numerous alternative options available worldwide. The administration believes that positioning their country as a pioneer in Bitcoin and financial freedom could give them a competitive advantage. Only time will reveal how investors will react to this.
El Salvador’s President Bukele Has Always Supported Crypto
El Salvador gained international attention in 2021 when President Bukele enacted legislation making Bitcoin legal tender alongside the US dollar. In addition to that, the country stands out as the first country to do so.
President Bukele has demonstrated a strong belief in cryptocurrencies by announcing that the country would purchase 1 BTC every day starting in 2022. He argued that adopting Bitcoin would enable citizens to easily send funds to relatives abroad and provide unbanked individuals with a convenient method for conducting transactions. According to him, the country’s Bitcoin bag is now profitable.
To further encourage the use of cryptocurrency in the country, the government announced plans to distribute $30 worth of BTC to individuals who signed up for an electronic wallet called Chivo. Despite skepticism from world leaders, the country remains steadfast in its support for Bitcoin and cryptocurrencies. This unwavering commitment may also encourage more investors to participate in the citizenship program.