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El Salvador's Economic Transformation: Drawing Parallels with Singapore's Success

VanEck's Gabor Gurbacs believes El Salvador can emulate Singapore's financial ascent, citing recent pro-Bitcoin moves and economic strategies.

Sun, 29 Oct 2023, 11:00 am UTC

Drawing inspiration from Singapore's meteoric rise as a financial powerhouse in the late 20th century, El Salvador is gearing up for a transformative journey.

Gabor Gurbacs, a strategy advisor with the investment management outfit VanEck, is optimistic about the prospects of this Central American nation. Gurbacs frequently draws comparisons between El Salvador's potential trajectory and Singapore's success story when addressing asset managers and portfolio handlers.

Driving this optimistic view are anticipated surges in immigration and capital investments, which Gurbacs believes will fuel El Salvador's economy in the upcoming years.

The recent buzz around El Salvador isn't without reason. The broadcaster and Bitcoin enthusiast Max Keiser, now a resident of El Salvador, recently urged people to consider the nation as an enticing destination. Keiser cites the dual legal tender status of Bitcoin and the U.S. dollar, improved security measures, and cultural perks like beautiful beaches and premium coffee as draws for El Salvador.

El Salvador’s economic aspirations have been invigorated under the leadership of President Nayib Bukele, who assumed office in June 2019. The nation has been performing notably well in financial markets, with its sovereign bonds garnering a staggering 70% return by August. This performance hasn't gone unnoticed; prominent financial institutions, including JPMorgan, are closely observing these developments.

September 2021 was a landmark month for El Salvador. Under Bukele's directive, the nation formally recognized Bitcoin as legal tender. This historic move was complemented by the introduction of Chivo Wallet, a Bitcoin custodial wallet available to all its citizens.

Further bolstering their commitment to the digital currency, El Salvador introduced a Bitcoin mining venture, Volcano Energy. This initiative, backed by a $1 billion investment, utilizes the nation's volcanic resources for power. The initiative is overseen by Keiser, who holds the position of executive chairman.

Other strategic moves by the country include a collaboration with Bitcoin miners Luxor Technology in October and the appointment of Dr. Saifedean Ammous, renowned for his book "The Bitcoin Standard," as an advisor to the National Bitcoin Office in May.

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