One year ago, the world started to exit from lockdown and the President of El Salvador announced that his country would be using Bitcoin as legal tender – becoming the first country in the world to do so. President Nayib Bukeke made the announcement at the Bitcoin Miami conference to the widespread delight of crypto fans and to international dismay and indeed condemnation by the international financial fiat community.
Much of the criticism depended on the lack of transparency from the El Salvadoran government, the volatility of Bitcoin and the vast energy consumption concerns of Bitcoin mining,
However, there were a number of compelling reasons that made such a bold move advantageous. Back in 2001, El Salvador had ceased using its national currency, the Colon, in favour of the US dollar. It was hoped to improve stability and also encourage inward financial investment. This did not happen, but the same arguments are being made in favour of Bitcoin. Interestingly, the volatility of Bitcoin may actually work in El Salvador’s favour as their currency is not pegged directly.
The country is also largely unbanked which offers an opportunity to leapfrog over traditional banking straight into crypto, rather in the same way mobile phone usage in developing countries ignores landlines. On the flip side, financial illiteracy poses similar problems when trying to engage with wallets, private keys and gas fees. When the news was announced last June, there were protests in the streets of San Salvador, the Chivo wallet crashed, and several retailer giants primed to accept Bitcoin as payment were late to the party.
Despite that, El Salvador has other precedents in making Bitcoin its legal tender. Back in 2019, a group of philanthropic Bitcoiners funded a Bitcoin project in the surfing village of El Zonte. Now known as Bitcoin Beach this tiny village accepts Bitcoin in its small shops, all three thousand inhabitants were given $50 each as a starter and other inhabitants were paid in Bitcoin to conduct sustainability projects such as cleaning beaches and recycling plastics.
One elderly resident was quoted as saying now the young people had hope and had choices other than trying to emigrate to America.
Finally, the undeterred President Bukele has plans to harness the natural energy of his country’s volcanos to mine Bitcoin with the creation of Bitcoin city at the base on the Conchagua Volcano. The city will be funded by Bitcoin bonds issued by El Salvador. Importantly, income tax will not be collected in this new city, designed in the same shape as Bitcoin.
It’s not surprising that given the continued ebullience in El Salvador’s cryptocurrency strategy that many Bitcoin maximalists are looking for a way to move their business and even their residency to El Salvador.
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One businessman looking to facilitate this process is new digital nomad Joey Langenbrunner, who has set up an agency to process immigration details for El Salvador. Langenbrunner visited El Salvador last year as part of a delegation from the Free Republic of Liberland. Liberland is a small micro nation on the banks of Danube looking for sovereign recognition by other countries. Formed more than seven years ago by Czech economist President Vit Jedlicka, this tiny micronation received interest from more than 600,000 to become citizens.
Langenbrunner is the Deputy Representative of USA for Liberland and he accompanied the President of Liberland as part of a small diplomatic mission to El Salvador. That visit was followed by a donation of one bitcoin from Liberland to help support El Salvador’s only children’s hospital and a determination by Langenbrunner to figure out a way to move there – both for himself and his wife as well as other interested people.
“We had an amazing time in the country – we even bought tacos on the beach with bitcoin. I knew there and then I wanted to get an El Salvadorian passport.”
It is currently not legal to obtain a passport as the government needs to change the constitution to allow foreign nationals to invest in El Salvador and become citizens as a result. Termed ‘golden visas’ these citizenship by investment are relatively commonplace across the EU and in the Caribbean.
Langenbrunner has already made a number of partnerships with immigration companies and hopes to be at the top of the list when it is passed into law.
“We are also processing digital nomad visas for Bitcoiners who want to check out living there before actually investing in the country.”
Local El Salvadorians are getting excited about the project. Langenbrunner spoke with Uber drivers who expressed interest in the new city.
“They told me it was the first time people were looking to come and live in El Salvador, as opposed to locals trying to emigrate to other countries. They are becoming excited about the future of the country.”
For more information, check out https://elsalvadorcip.com/ where the CIP stands for Citizen Investment Programme, to check out Nomad visas, buying property or the main CIP programme.