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El Salvador’s Freedom Visas: Why They Might NOT Attract Crypto Millionaires

Last Updated December 12, 2023 12:29 PM
Josh Adams
Last Updated December 12, 2023 12:29 PM
Key Takeaways
  • El Salvador recently announced its ‘Freedom Visa’ scheme.
  • It aims to attract up to one thousand crypto millionaires every year.
  • Questions persist about how popular the program will be.

Tucked along the Pacific coastline, El Salvador cuts a striking figure. Volcanic peaks lord over lush rainforests, while arid plains stretch to the Guatemalan border. The smallest country in Central America, El Salvador’s natural beauty belies immense challenges. 

Poverty and inequality remain high for most citizens, with the COVID-19 pandemic inflicting further damage. Yet president Nayib Bukele sees hope on the horizon, announcing a radical plan  to court one thousand crypto millionaires every year through his new “Freedom Visa” program.

A Pitch to Crypto Millionaires

Unveiled in early December, the visa targets high net-worth individuals willing to donate $1 million towards El Salvador’s development. 

In exchange, participants gain fast-track residency and eventual citizenship for themselves and their families. Its website asks people to “experience freedom, security and a Bitcoin (BTC) lifestyle by adopting El Salvador as your home”, tying the offer to Bukele’s landmark decision to adopt Bitcoin as legal tender in 2021.

The country has even enlisted help from major crypto firm Tether to facilitate visa payments in either Bitcoin (BTC) or Tether’s USDT stablecoin.

The proposal aims to attract 1,000 new residents per year, funneling fresh capital into the economy. It also aims to attract a kind of entrepreneurial character that it believes will help the country’s much-needed development. Although right-wing economists aren’t necessarily smitten with the country’s performance since its Bitcoin-friendly turn, criticizing  the country’s lack of strong property rights, rule of law and economic freedom. 

However, the country performs around average for the region on quality of life measures, according to the Human Right Measurement Initiative . Questions still remain about the attractiveness of such a scheme, and how high the bar is for potential applicants.

How Tempting Is the New “Freedom Visa”?

Uptake may prove underwhelming. At $1 million, El Salvador’s visa is far pricier than most golden visa or citizenship schemes worldwide. Neighboring Dominica and Grenada offer passports from $100,000, while Portugal, Greece and Montenegro require similar investments of €250,000-€500,000 in real estate or government bonds.

More critically, El Salvador’s rampant crime, corruption and uneven development make it a dubious magnet compared even to mid-tier European options. 

Certainly, El Salvador’s Bitcoin experiment has proved rocky thus far, drawing IMF warnings  over economic stability and public adoption. Although, recent pumps in the crypto market have put the decision in a better light.

If the Freedom Visa falters, Bukele may be left relying on true crypto believers to embrace his grand vision. For neutral observers, El Salvador’s bold gamble offers more suspense than assurance.

 

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