Gabor Gurbacs, strategy adviser of investment management giant VanEck, believes that incoming investment capital and immigration will lead to a major economic shift, transforming El Salvador into a financial center. Drawing parallels with Singapore’s economic recovery in the 1990s, Gurbacs highlights the potential of foreign direct investment (FDI) in driving economic expansion. Citing Singapore as a prime example, he notes that the country has emerged as a major hub for crypto, blockchain, and Web3 technologies, attracting crypto millionaires seeking secure and tax-friendly havens for their digital assets.
- Foreign Direct Investment (FDI):
“In the 1990s, Singapore recovered strongly from the 1985-86 recession, in part thanks to the foreign direct investment (FDI)-led economic expansion in the Association of Southeast Asian Nations (ASEAN).” – Gabor Gurbacs
Despite recent concerns over the country’s conservative approach towards digital assets and the collapse of the FTX exchange, companies like Coinbase continue to expand and establish their presence in Singapore. In fact, Coinbase secured a full major payment institution license under Singapore’s Payment Services Act, showcasing the country’s attractiveness as a business destination.
Gurbacs’s tweet was in response to Bitcoiner Max Keiser’s comment, advocating for people to move to El Salvador. Keiser refers to the Central American country as “The New Land of the Free,” indirectly criticizing the United States. Keiser, who resides in El Salvador, advises President Nayib Bukele and serves as the executive chairman of the Bitcoin mining startup Volcano Energy, which received a $1 billion investment in June.
- The Bitcoin Connection:
“How are this startup and Keiser’s connection to the President relevant? In September 2021, El Salvador famously made Bitcoin legal tender, and it launched a custodial wallet called Chivo Wallet – both of which have since been heavily criticized.” – Gabor Gurbacs
Despite criticisms, El Salvador remains committed to its Bitcoin plans. The country is set to create a Bitcoin City and utilize volcanic resources to power the aforementioned Volcano Energy. Just recently, El Salvador announced the launch of Lava Pool, the nation’s first Bitcoin mining pool powered entirely by renewable geothermal energy, in collaboration with tech giant Luxor Technology.
Amidst these developments, President Bukele has filed for re-election in next year’s polls, generating controversy as critics argue that this move goes against the country’s constitution. Nonetheless, El Salvador has achieved significant financial gains, with its sovereign bonds yielding a remarkable 70% return by August. In addition, the Ministry of Education initiated a pilot program to educate 150 public school teachers about Bitcoin, enabling them to pass on their knowledge to students nationwide.
- The Potential of El Salvador:
“Incoming investment capital and immigration will propel El Salvador into becoming a financial center, shaped by the adoption of Bitcoin as legal tender and the establishment of innovative ventures like Volcano Energy.” – Gabor Gurbacs
