Latam Insights: El Salvador’s Gold-to-Bitcoin Power Trade, Argentina Opens to Foreign Crypto ETFs

Welcome to Latam Insights, a compendium of the most relevant crypto and economic news from Latin America over the past week. In this issue, El Salvador could make a gold-to-bitcoin power trade, Argentina opens up to foreign crypto ETF opportunities, and Brazil might scale back its stablecoin self-custody ban provision.

Latam Insights: El Salvador's Gold-to-Bitcoin Power Trade, Argentina Opens to Foreign Crypto ETFs

El Salvador Discovers $3 Trillion Gold — Will It All Go Into Bitcoin?

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.

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.

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.”

Argentina Opens up Foreign Crypto ETF Investment Opportunities

Argentina is opening its doors to more investment options each day under the direction of President Milei’s libertarian policies. The CNV, the securities watchdog of Argentina, announced a market-wide movement to allow the entrance of foreign investment offerings linked to several crypto ETF opportunities, including Ethereum and Bitcoin, gold, and even the Chinese stock market index.

These investments will be available in stock markets under the figure of CEDEARs, which are Argentine deposit certificates issued by commercial or investment banks that have an agreement with the foreign companies issuing these instruments. Investors are effectively using these institutions as bridges, given that they are forced by law to be backed 1:1 with the subjacent assets.

Brazilian Central Bank May Withdraw Provisions Banning Stablecoin Self-Custody

The Central Bank of Brazil acknowledged that a proposal making self-custody of stablecoins illegal in the country might be withdrawn if certain conditions are met. In a public hearing, the deputy head of the Financial System Regulation Department, Renato Kiyotaka Uema, said that these provisions were put in place to bring stablecoin transactions to light, allowing them only between regulated exchanges. Nonetheless, he stressed that if there were a technical solution to combat this opacity, the institution could roll back these proposed changes. “This is a public consultation, so if there are suggestions that mitigate these risks, the technical area will act to interfere as little as possible with the market’s agility,” Kiyotaka assessed.