El Salvador “Passports for Crypto” part of President’s Independence Plan

Tired of the excessive tax burden, myopic government measures, banking and/or traveling restrictions in your home country and wishing to break free? Well, where there is a will, there’s a way. The International Wealth immigration consultants suggest you obtain an El Salvador passport for crypto. With a new passport in your collection, you will improve and enlarge your choices and at the same time promote the new homeland’s independence from financial regulators trying to strengthen American dollar prospects and keep them bright globally.

Financial success and independence go hand in hand, no doubt about it. Acquiring a second citizenship abroad is the best instrument for you to gain independence, lay foundations for success and build thereon, given today’s situation.

Contrary to the popular belief, it is possible to acquire a second passport without further delay even if nothing connects you with the new homeland, say, having citizen relatives or residing therein. The only thing you shall do to make it a reality is obtain citizenship by investment in a target jurisdiction.

The deal is profitable for potential host countries as well. With new-found income sources, they gain more independence and manage to avoid borrowing money from institutions like the International Monetary Fund (a.k.a. IMF) that protect creditors’ interests. The above independence factor is essential for small island nations and former colonies.

With crypto users not depending on their governments, crypto may be a useful instrument to gain more independence. It is true for both individuals and entire countries. This is why the El Salvador government decided to declare Bitcoin legal tender in El Salvador. Trying to reduce dependence on the US currency, they initiated preparations to launch the El Salvador citizenship by investment a.k.a. second passport scheme, seeing it as a way to kill 2 birds with one stone. If introduced, the CBI program will provide for an opportunity to obtain El Salvador passports for Bitcoins to crypto investors.

BTC to be used as legal tender – truth or dare?

In June 2021, the El Salvador Parliament passed the law formalizing the Bitcoin (BTC) status as the El Salvador lawful currency by an overwhelming majority. From that moment on, the Bitcoin may be used alongside the American dollar in that capacity in El Salvador. The corresponding amendments to the El Salvador legislation were introduced on September 7, 2021 resulting in major changes:

• local sellers of goods and services shall now accept payments in USD or BTC
• no capital gains tax is collected in respect of BTC crypto assets
• taxes may be paid in BTC
• prices are allowed to be shown in Bitcoins.

The El Salvador Government promised “alternatives to secure BTC transitions and instant BTC/USD conversion” to both natural and legal persons unable to accept BTC payments due to no required infrastructure or proper tech knowledge. The state obliged the parties involved to “introduce educational programs and instruments for the El Salvador populace to gain access to BTC transactions”.

A government-established e-wallet developed in cooperation with Strike experts who partook in drafting the above law shall be used for currency conversion. Please refer to the above document for the statutory wording.

Getting ready to issue El Salvador passports for crypto

Due to the promise to exempt BTC transactions from a capital gains tax the El Salvador government made, those multiple El Salvador citizens who preferred to operate in the shadows before while staying under the bank radars, joined the El Salvador formal economy.

The Bitcoin initiative promoted by the El Salvador government is meant to win over not just the jurisdiction’s natives but well-off expats looking for an immigration destination as well. To bolster their intentions, an additional legislative initiative was introduced with a view to set up an investment immigration scheme in El Salvador allowing foreign nationals to obtain El Salvador passports for Bitcoins.

According to the government statement made in June 2021, the initial intention of the El Salvador authorities was to issue permanent residence permits to well-affected and loyal foreign citizens investing upward of BTC 3 in the El Salvador economy. Those interested could do it via purchasing real estate or local business capitalization. 

In November, preliminary stipulations were specified. To avoid volatility, the investment threshold was linked to the US dollar. Additionally, fast-track procedures were introduced for potential applicants to obtain citizenship by investment in El Salvador with an opportunity to travel to the United Kingdom, the Schengen states, most South American jurisdictions, and many more states around the globe without a visa.

Volcano Bonds (a.k.a. Bitcoin-backed bonds) were named as the investment target. Investment in securities was supposed to come with a 6.5% annual interest and a 10-year maturity. Expected to start in March 2022, the Volcano Bond emission was postponed due to it being necessary to amend the El Salvador legislation and jump over constitutional hurdles.

Reasons to promote El Salvador passports for crypto initiative: historical background

Trying to overcome US and IMF financial pressures, the El Salvador government accepted Bitcoin as legal tender. In reality, they potentially initiated El Salvador transformation from a traditional banana republic into a prosperous economy.

Commonly referred to as El Pulpo (Spanish word for an octopus) by the natives, United Fruit Co. headquartered in the US, was among the most influential companies in Latin America. It used to grow and trade in fruit, remaining a monopoly in the banana trade.

Being a monopoly, El Pulpo dominated Central America and the West Indies, where it controlled almost 250,000 hectares by 1954. Panama, Guatemala, Honduras, and Costa Rica all depended on banana import generating most of their export profits therefrom. This is why they were nicknamed banana republics.

Positioned as an industry monopoly, El Pulpo controlled the above economies as well as the ones in several other jurisdictions in the region. Trying to bribe local politicians to achieve its goals and oust those leaders who were not agreeable with the rules imposed by Americans, El Pulpo received unhelpful negative acclaim.

Jacobo Arbenz who won democratic presidential elections in Guatemala, was ousted by El Pulpo in 1954 supported by the US Government as the company didn’t like him having partially expropriated and redistributed company’s lands.

With its actions, El Pulpo triggered off instability in the Central American jurisdiction. The latter resulted in a 36-year long civil war from 1960 till 1996. The El Pulpo heritage was destruction and death in Guatemala and the whole Central America.

United Fruit Company embodied neocolonialism in the region, and although El Salvador managed to escape being directly influenced by El Pulpo, just like many of its neighbors it had to repeatedly deal with US political intervention.  .

Indirectly inspired by El Pulpo, the 12-year long civil war in El Salvador resulted in a 75,000 death toll. The victims were mostly civilians. Although debatable, the fiat financial system with the IMF promoting it is oftentimes compared to El Pulpo and its tactics.

El Salvador – first but not last jurisdiction banking on crypto

In September 2021, El Salvador made it into history as the first country ever to have officially accepted Bitcoin as legal tender. The IMF and the World Bank hastened to reprimand the El Salvador government warning it of potential political effects and calling it to cancel the said political decision. Just like Agent Smith from the Matrix film series, the International Monetary Fund and the World Bank tried to get rid of any anomalies claiming themselves to be guardians of the global financial system.

The El Salvador government refused to yield to the international regulators and went on with the revolutionary project. They set about issuing El Salvador passports for crypto to those interested. It is possible El Salvador was the first jurisdiction to have accepted Bitcoin as legal tender although it is not likely to become the last one. It is not surprising in this context that the US and the IMF are not happy with the developments.

Just like United Fruit Company used to control Latin America, the IMF exercises its next to limitless powers over the global economy. Originally established at the Bretton Woods conference in 1944 to secure effective international cooperation and keep exchange rates stable as well as guarantee safe currency transactions  and improve international liquidity by expanding it, the IMF significantly reinforced and expanded its functions.

More hindrance than help

In 1971, the IMF lost powers to regulate exchange rates and turned into a last resort creditor for poverty-ridden jurisdictions, with Richard Nixon closing the so-called gold window. As things stand, this assistance proved not-so-successful and the outcomes leave much to be desired.

According to a Heritage Foundation study, the IMF loans to developing economies were predominantly ineffective, with some of the jurisdictions involved doing worse afterwards:

• 48 out of 89 least developed economies that enjoyed IMF loans from 1965 to 1995, aren’t doing better economically today than they did before the IMF loans
• 32 out of those 48 economies got poorer after the IMF loans
• 14 out of those 32 states experienced a 15% GDP contraction adjusted by inflation as compared to the pre-loan period.

Salvadorans facing strong opposition

To realize why the IMF preaches down Bitcoin as legal tender in El Salvador, let’s do a quick reality check. It is common knowledge that El Salvador is a small jurisdiction with 6,500,000 citizens and a GDP of USD 25,000,000,000. Yet, the IMF is sure that using crypto as legal tender in El Salvador carries risks for financial stability, consumer protection, and financial integrity”.

As it happens, the truth is out there. Preaching dollar dominance in the world economy, the IMF does its best to promote the principles it sticks to, and if a state accepts Bitcoin as legal tender, this poses a significant threat to the US-established routines.

Originally designed as an alternative monetary constitution with an aim to de-emphasize regulatory authorities like central banks and international monetary institutions, e.g., the IMF, crypto can eventually reduce USD significance in both El Salvador, Central America, and many more states, given that the El Salvador economy is loaded with US dollars. 

As a result, multiple new superpowers may appear and USD can potentially give way to Bitcoin as a new global reserve currency. In this brand new world, the IMF will lose both its status and dominance.

The IMF was not happy about Volcano Bonds secured by Bitcoin. The Fund voiced concerns as to the risks rooted in crypto-secured bond issuance. 

The El Salvador government is about to undertake a Volcano bond issue equivalent to USD 1,0000,00,000. The money raised is to be used to purchase Bitcoins worth USD 500,000. The other USD 500,000 shall be used to finance infrastructure development in order to build generating capacities and use volcanic energy to mine Bitcoins.

If they successfully enter the world market worth USD 100,000,000,000,000, Volcano Bonds will not only change it but also send a message to other countries trying to find an exit out of the fiat-based debt pyramid the IMF imposed. The idea to grant El Salvador citizenship to bond investors ready to pay for it in crypto does not float the IMF boat and IMF experts do their best to prevent it from happening.

Passports for crypto issued in Grenada, Vanuatu, and St Kitts – no need to wait

As things stand, crypto investors enjoy several already available opportunities to obtain second citizenship in a fast and easy way. Citizenship by investment schemes providing for the said option have been launched in 3 small island nations known as global CBI market powerhouses:

• Grenada: applicants for Grenada CBI contribute USD 150,000 to the corresponding state fund or purchase properties worth upwards of USD 220,000 with a 5-year holding period in the jurisdiction. They are free to lease out the said real estate to earn passive income. Grenadians have the right to visit China, the United Kingdom, and the Schengen states without a visa. An opportunity to apply for the E-2 business visa to the US is open for them.
• Vanuatu: although not offering visa-free access to Schengen states for its citizens any longer, the jurisdiction comes with no personal income tax for its fiscal residents, while a superb tropical climate and living away from political storms are always there for you to enjoy. The minimum investment amount is USD 145,000. The money shall be contributed to the corresponding government fund.
• St Kitts and Nevis: The amount to be contributed by St Kitts and Nevis CBI applicants is USD 150,000. Alternatively, they are free to invest USD 200,000 in local real estate. In the latter case, the opportunity comes with a 7-year holding period. No personal income tax for the country’s fiscal residents, as well as visa-free access to the United Kingdom and the Schengen Area are among the jurisdiction’s undeniable advantages.

FYI: none of the above jurisdictions provides for an opportunity to make crypto contributions in order to apply for CBI therein, i.e. passports for Bitcoin or any other crypto are not available. Yet, applicants are free to convert their Bitcoins or any other crypto in a fiat currency via a licensed immigration agent who will submit the CBI application in question together with the corresponding funds to the local government on behalf of the CBI applicant.

If you intend to apply for any of the 3 CBI schemes above, you can do it remotely. The processing times are short enough. Applicants for citizenship by investment in St Kitts and Nevis or Vanuatu obtain their golden passports in 1.5 to 2 months only.

Expert assistance for those wishing to acquire passports for crypto abroad

With HNWIs trying to build on the momentum by gaining new opportunities and independence associated with second passports, demand for citizenship by investment is growing rapidly and multiple options to obtain it arise on a regular basis. With the above in mind, expert assistance is essential. To learn more about it, you are welcome to contact the International Wealth way-wise immigration experts aware of all CBI angles.