El Salvador approves expedited citizenship for Bitcoin “donors”

El Salvador’s Congress, in a late Wednesday vote, passed a migration law that offers expedited citizenship to foreign investors who contribute Bitcoin to government social and economic development initiatives. The reform, supported by President Nayib Bukele’s New Ideas party, is expected to take effect in the coming days.

Bitcoin “donations” for citizenship

The new law, which does not specify a minimum Bitcoin donation requirement, emphasizes the “vital interest” of President Bukele’s development projects. It highlights the involvement of “altruistic foreigners” seeking to support El Salvador’s economic, social, and cultural development through Bitcoin donations.

Foreign Bitcoin investors eligible for citizenship under this law will bypass the standard naturalization process, which typically requires five years of permanent residence for non-Spanish speakers or two years for those married to a Salvadoran citizen. This move aims to attract foreign investors to the country and expedite the citizenship process for those embracing Bitcoin.

Challenges and controversies

While El Salvador has been proactive in embracing Bitcoin, the implementation has faced challenges, including slow progress and limited usage. The International Monetary Fund (IMF) has expressed concerns about the risks associated with El Salvador’s adoption of Bitcoin as legal tender. The country’s bid for economic growth is further complicated by ongoing negotiations with the IMF for a new financing program.

President Bukele, despite potential constitutional barriers, is pursuing re-election in the upcoming February 4 election. The constitution seemingly prohibits consecutive terms, but a 2021 ruling by the top court, whose members are appointed by Congress, allowed Bukele to stand for re-election, drawing international condemnation, including from the United States.

Conclusion

El Salvador’s move to grant expedited citizenship in exchange for Bitcoin “donations” is a bold step, reflecting the government’s commitment to leveraging cryptocurrency for economic development. However, challenges and controversies, including IMF concerns and constitutional debates over re-election, add layers of complexity to this innovative approach.

In summary, El Salvador’s foray into the intersection of cryptocurrency and citizenship is a noteworthy development, but its success and implications remain to be seen in the coming months.

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