El Salvador offers citizenship to those with $1m Bitcoin or Tether as its own Bitcoin bet pays off

El Salvador continues to expand its Bitcoin-friendly initiatives, with its own Bitcoin investments now worth $120 million.

The Central American country, with stablecoin issuer Tether’s support, has launched a visa programme that can also grant citizenship through a $1 million investment in Bitcoin or Tether.

Several governments offer visas and citizenship in exchange for significant investments, typically in real estate or government bonds. With its “Freedom Visa,” El Salvador has become the only country to approve investment in cryptocurrency — Bitcoin or the dollar-pegged stablecoin Tether — as a pathway to a visa and potential citizenship.

In a statement shared with DL News, Adriana Mira, El Salvador’s vice minister of foreign affairs, called the Freedom Visa programme “an extraordinary opportunity for individuals to actively participate in shaping a prosperous future for our nation.”

In the same statement, Paolo Ardoino, CEO of Tether, said: “Our collaboration with the government of El Salvador is a significant moment for Tether as a technology provider.

“This initiative highlights our commitment to supporting cities and communities in their pursuit of financial freedom and innovation,” Ardoino added.

The government has capped visas at maximum 1,000 people per year.

“This is a once in five hundred year moment in which just 1,000 participants can invest in a renaissance that they help build,” the visa programme’s website said. “Their $1 million contribution will go toward economic development, cultural enrichment and social programs meant to achieve maximum economic development and rebirth.”

Applicants pay a $999 deposit in Bitcoin or Tether, undergo KYC, and, if approved, the deposit counts towards a $1 million Bitcoin or Tether investment for the Freedom Visa and citizenship. The programme is open to single individuals and families.

According to Passport Index, the Salvadoran passport is the world’s 35th strongest, granting visa-free travel to the European Union’s Schengen travel zone of 27 countries.

Some Caribbean nations, such as Antigua and Barbuda, offer equally or even more powerful passports to investors at more competitive prices — starting as low as $100,000, through various investment programs.

“Amidst stability, El Salvador shines as one of the safest countries in the region. It is an ark of freedom in Central America,” the visa programme website said.

Still, the Bitcoin-friendly country ranks poorly on freedom indices.

El Salvador scores 56 out of 100 in Freedom House’s 2023 index. It lowered its score from last year for reasons including, but not limited to, increasing state surveillance and the arrests of government critics under the guise of an ongoing crackdown on gang activity.

El Salvador and Bitcoin

In June 2021, the Central American country became the first to make Bitcoin legal tender, requiring all businesses to accept it alongside the dollar. The government also invested in Bitcoin, holding it as part of its national treasury — a move that continues to attract international attention and scrutiny.

El Salvador held 2,766 Bitcoin — worth about $120 million — as of December 8, representing a 3% increase in the value of its investments. This week, Bitcoin rose to levels last seen in the second quarter of 2022, trading just above $44,000.

Another significant aspect of El Salvador’s Bitcoin affinity is the so-called “volcano bond.”

In late 2021, President Nayib Bukele announced plans to issue $1 billion in Bitcoin-backed bonds to harness geothermal energy from volcanoes for Bitcoin mining. The proceeds were then earmarked for his ambitious “Bitcoin City” project. These plans have yet to materialise, with no reports of the bonds’ issuance or any progress on Bitcoin City.

The launch of the bonds, originally planned for March 2022 with a $100 minimum investment, has faced multiple delays. Officials attributed these delays to various factors, including declining Bitcoin prices and legislative delays.

While Tether is an investor in a 231-megawatt Bitcoin mine that El Salvador plans to build in the Metapan region, Bukele’s presidency is on hiatus.

He stepped down from office on December 1 to prepare his campaign for the February 2024 presidential election.