Bitcoin Advocate Nayib Bukele Re-elected as President of El Salvador

Bitcoin supporter Nayib Bukele has secured another five-year term as President of El Salvador. He garnered the support of 83% of voters (with 31% of votes counted), according to Reuters.

The agency noted that Bukele’s victory was attributed to his successful actions against criminal gangs, which improved the country’s security situation.

It is expected that the president’s party, Nuevas Ideas, will secure 58 out of 60 seats in the local legislative body.

De acuerdo a nuestros números, hemos ganado la elección presidencial con más del 85% de los votos y un mínimo de 58 de 60 diputados de la Asamblea.

El récord en toda la historia democrática del mundo.

Nos vemos a las 9pm frente al Palacio Nacional.

Dios bendiga a El Salvador.

— Nayib Bukele (@nayibbukele) February 5, 2024

Reuters recalled that Bukele came to power in 2019 with promises to eradicate gang violence and revive the stagnant economy.

One of the steps taken was the adoption of digital gold as legal tender, which drew criticism from the IMF.

Plans to create Bitcoin City — a special economic zone with no income, property, capital gains, or payroll taxes, where volcanic energy is used for mining the first cryptocurrency — have not progressed, according to journalists.

The agency noted that at the end of 2023, the IMF described the country’s financial situation as “fragile.” Previously, the organization acknowledged that the risks of Bitcoin legalization “did not materialize.”

At the time of writing, El Salvador’s authorities hold 2381 BTC valued at $102.8 million, according to Buy Bitcoin Worldwide.

Continuation of the Bitcoin Strategy

Shortly before the elections, El Salvador’s Vice President Felix Ulloa confirmed to Reuters the state’s commitment to the adopted Bitcoin strategy. These plans include issuing bonds backed by digital gold and continuing the construction of Bitcoin City.

The official expressed hope for successful negotiations with the IMF regarding a new funding tranche amid a reduction in national debt.

Earlier, Ulloa stated that the legalization of Bitcoin in 2021 was a crucial element in the country’s crisis recovery. According to him, the anti-gang program and digital gold were key factors in initiating a tourism boom.

Parallels with Singapore and a Model to Follow

VanEck strategy advisor Gabor Gurbacs predicted an increase in capital inflow and immigration to El Salvador in the coming years. He suggested that the country could become the “Singapore of the Americas.”

This was in response to a positive comment by TV host and Nayib Bukele’s advisor Max Keiser, who called the country “The New Land of Freedom.”

I say often to portfolio managers and asset allocators that El Salvador has the potential to become the Singapore of the Americas. I expect continued increase in immigration to, capital investment in and overall growth in El Salvador. https://t.co/CmT554x12j

— Gabor Gurbacs (@gaborgurbacs) October 28, 2023

El Salvador’s legalization of the first cryptocurrency has become an example for authorities in other countries. They may consider this measure as a solution to economic problems or to expand financial freedom.

In March 2022, Lugano (Switzerland) recognized digital gold, Tether, and the city token LVGA as legal tender.

In April of the same year, the CAR granted Bitcoin similar status. In the same month, authorities in the Próspera economic zone in Honduras made a similar decision. In January 2024, local businesses and residents of the special territory were allowed to set prices for goods and services in digital gold.

In November 2023, Argentina concluded its presidential elections, resulting in the election of libertarian and Bitcoin supporter Javier Milei, an opponent of central banks.

How Argentina’s New President Could Impact the Crypto Market — Experts Explain

Despite the Salvadoran authorities’ extensive promotion of digital gold’s benefits, Bitcoin’s integration into the country’s economy remains low.

A recent survey by the José Simeón Cañas Central American University revealed that 12% of Salvadorans used the first cryptocurrency for purchases in 2023.

In December 2023, the authorities introduced the “Bitcoin Freedom Visa.” Under the program, El Salvador offers residency and the chance to obtain citizenship for investments of $1 million through digital gold or USDT.

In February 2024, El Salvador’s authorities registered the platform for trading tokenized stocks and bonds, Bitfinex Securities, as the first licensed crypto service provider.