Bitcoin expert advising El Salvador on new bonds
Max Keiser is advising the government of El Salvador on a proposed $1 billion bond offering to fund a “bitcoin city” and geothermal-powered mining operations, according to the report. The bond would use half its proceeds to purchase bitcoin, with the expectation that the asset’s price will rise to generate returns for investors. Keiser refers to bitcoin in the language of populist revolutionaries, using phrases like “unconfiscatable wealth” and calling it a future “global reserve currency.” On his show The Keiser Report, which airs on Russian state-owned English language media network RT, he has appeared wearing a tie emblazoned with bitcoin symbols.
From Stocks to Crypto: The Keiser Rise
Born in 1960 in Westchester, New York, Keiser dabbled in theater and stand-up comedy before working as a stockbroker in the 1980s at Paine Webber and Oppenheimer & Co. He also co-founded the Hollywood Stock Exchange, where investors can buy and sell virtual shares of celebrities, and a small hedge fund, Karmabanque, that seeks to profit off of shorting companies facing reputational damage.
In media, he has presented The Oracle with Max Keiser for Al-Jazeera, and later for BBC News. He also anchored On the Edge, a news program for Iran’s Press TV, and produced and appeared in Al-Jazeera’s People & Power series. In 2009, he created The Keiser Report for RT, a program where he presents financial news with his wife, Stacy Herbert.
Keiser’s public association with bitcoin began around 2013. About that time, he interviewed former British Parliament member George Galloway Jr., who spoke about wanting to use bitcoin to bolster the London economy. A year later, Keiser started a cryptocurrency project where he launched “MaxCoin,” created by two students from the University of Bristol. He discussed his experiment on The Keiser Report, and later launched another cryptocurrency called “StartCoin.”
He also started to speak out against big banks, including describing JPMorgan as “the biggest financial terrorist on Wall Street.” CEO Jamie Dimon has since openly criticized bitcoin, calling it “fool’s gold.” JPMorgan has, however, launched some bitcoin-based investment products.
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Around the mid-2010s, Keiser started advocating for bitcoin more aggressively. During an interview with fintech analyst and investor Tuur Demeester, Keiser said a “Shangri-La” of bitcoin was on the horizon — in other words, a country or city that would adopt the currency as legal tender and accelerate the demise of fiat money.
El Salvador Hires Bitcoin ‘Ambassador’
With the adoption of the Bitcoin Law in El Salvador, President Nayib Bukele said he would listen to the “most qualified minds” in crypto to help guide its implementation. That’s where his relationship with Keiser comes into play.
So far, the government has not said exactly how Keiser will contribute to the plan for the bitcoin bonds. However, on social media Keiser has published videos and photographs of his meetings with government officials and other well-known bitcoin promoters.
On an episode of his show, Keiser declared that “El Salvador will be able to pay off absolutely all of its foreign debt with bitcoin bonds.” Since Keiser made that proclamation, El Salvador’s government has been getting increasingly insistent about issuing bitcoin bonds, and potentially planning to use them in the future to pay down the country’s $23 billion national debt.
It is worth noting that the price of bitcoin has dropped by nearly 50% from its high of almost $70,000 in November. This volatility makes it unclear whether an asset should be used as backing for a sovereign bond, especially when the country’s political climate is shifting.
A Nation’s Future at Stake in a Bubble
Original perspective: The move mirrors the logic of speculative bubbles seen in tulip mania or the dot-com era, where a new technology is used to justify extreme financial risk under the banner of innovation. In this case, the technology is a decentralized currency, but the mechanism remains the same: betting a nation’s future on the price action of a single asset class.
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A Complex Partnership
Earlier this month, he arrived in El Salvador with his wife, Stacy Herbert, and met with Minister of Finance Alejandro Zelaya, sparking curiosity about what exactly he is up to. The term “Bitcoin Ambassador” is perhaps not just for personal branding purposes. Keiser is a bitcoin ambassador of sorts. He is expected to help advise the government.
Originally from New York, he’s had a colorful career as a stockbroker, broadcaster, hedge fund founder, entrepreneur, and documentary filmmaker. Last year, he suggested the possibility of using bitcoin-backed bonds to shore up the poor country’s finances. He also managed to swiftly forge a relationship with El Salvador’s government officials and has suggested he would be interested in obtaining citizenship in the country.
We reached out to Keiser to see if he wanted to provide us with more explanation, but he has not replied.
Behind the Bitcoin Paradise
The country’s political environment has been described by some observers as being much more like a dictatorship than democracy. The 40-year-old Bukele has fired the country’s top prosecutor and five high-ranking judges, replacing them with loyalists. Under his regime, the government has also reportedly spied on dozens of journalists and human rights defenders.
In addition, the government has been accused of negotiating with criminal groups in order to achieve a historic reduction in homicides. Bukele’s allies, including cabinet members, currently appear on a State Department list of Central American officials deemed corrupt.
