Salvadoran President Nayib Bukele has highlighted the potential of El Salvador’s untapped gold reserves, estimating their value to reach over $3 trillion if fully explored. Posting on social media platform X last week, Bukele underscored how responsible mining could revolutionize the nation’s economy. He envisions the proceeds funding critical projects, including job creation, infrastructure improvements, and overall economic advancement. Bukele has proposed repealing the country’s 2017 ban on metallic mining, describing the restriction as a barrier to leveraging the country’s vast natural wealth.
The Salvadoran president referenced studies suggesting that only 4% of the nation’s mining areas have been explored, uncovering an estimated 50 million ounces of gold valued at $131 billion—approximately 380% of El Salvador’s GDP. He believes full exploration could elevate the reserves’ value to over $3 trillion, or 8,800% of GDP. He said:
We’ve also found gallium, tantalum, tin, and many other materials needed for the 4th and 5th industrial revolution.
He attributed the country’s mineral abundance to its location within the Pacific Ring of Fire, known for volcanic activity and rich deposits. While proponents laud the discovery as transformative, critics warn of potential environmental degradation. Bukele highlighted the potential for sustainable mining to balance economic benefits with environmental protection, but some question whether El Salvador actually possesses such significant gold reserves.
El Salvador’s unique stance as the first country to adopt bitcoin as legal tender adds a cryptocurrency-focused dimension to the gold discovery. Pierre Rochard, vice president of research at Riot Platforms, noted:
El Salvador discovered $trillions of gold deposits that when mined will massively dilute the above-ground supply of gold. This can’t happen with bitcoin because the code is open source.
Bukele echoed this sentiment, stating: “We’ll dilute that thing like there’s no tomorrow.”
Max Keiser, a prominent bitcoin advocate, proposed monetizing the gold reserves to invest in bitcoin, aligning with Bukele’s vision. He suggested selling convertible preferred shares to fund large-scale bitcoin purchases, arguing that the cryptocurrency’s growing dominance over gold makes it a more valuable long-term asset. He shared on X: “El Salvador should monetize this $3 trillion in gold by selling a series of 0% convertible preferreds (a la Saylor) and buy as much bitcoin as possible under $200,000. As bitcoin continues to demonetize gold at a rapid pace, the actual value of the gold is really closer to 1/10th of current estimates, but still, $300 billion in bitcoin now is better than a wasting asset like gold in the future.”
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