In short: Not content with being the first country to accept Bitcoin as legal tender, El Salvador plans to build an entire city based on cryptocurrency. Of course, it will have a circular shape, resembling a coin, and will be placed at the foot of the Konchagua volcano to harness geothermal energy to power the city and its bitcoin mining operations.
El Salvador’s President Nyyib Bukele has unveiled plans to build a Bitcoin City along Fonseca Bay, between La Union and Conchagua. Speaking at a bitcoin promotional event in the coastal town of Mizata late Saturday, Bukele said it will include residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, railroad – “everything dedicated to bitcoin “.
¡El Salvador será el primer país del mundo en tener una #BitcoinCity!
Estará entre la ciudad de La Unión y Conchagua. Las personas podrán vivir en La Unión pero trabajar en la #BitcoinCity… Pronto empezarán a ver todos los beneficios, cuando el desarrollo y la inversión llegue. pic.twitter.com/21bx7Yc5aJ
– Casa Presidencial 🇸🇻 (@PresidenciaSV) November 21, 2021
In the center of this crypto metropolis, there will be a square with a huge Bitcoin symbol. Moreover, the city will not have taxes on profits, property, capital gains or wages, only value added tax. The profits from this will be used to “build the city”, Bakele said, while the rest will be used to keep the streets “tidy and clean.” BBC…
Bukele never gave a timeline for the city’s construction, although he said most of the public infrastructure would cost around 300,000 bitcoins, which would be $ 17.2 billion at the current BTC price. The President also announced plans to issue a $ 1 billion Bitcoin Bond developed by Blockstream. Half of the money will go to energy and Bitcoin mining infrastructure, and half will be used to buy more Bitcoins, bringing the total amount of Bitcoins El Salvador owns to just under 2,000.
Blockstream strategy director Samson Moe said the bonds, known as “volcanic bonds,” will be worth $ 1 billion backed by bitcoin and will initially have a 6.5% coupon. El Salvador will start selling some of its crypto assets after a five-year lockdown and paying additional dividends to bondholders. “This will make El Salvador the financial center of the world,” Moe said.
After issuing 10 Volcano Bonds, the $ 5 billion in Bitcoin will be taken off the market for several years, Moe said via Reuters… “And if you have 100 more countries to issue these bonds, that would be half of Bitcoin’s market capitalization.”
El Salvador became the first country to accept Bitcoin as its official currency in early September. Things didn’t go as planned when the price of BTC dropped by $ 10,000, but Bukele took advantage of that drop to buy another 150 bitcoins. There were also problems with the country’s wallet system during its debut.
El Salvador has already started mining BTC using the clean, zero-emission geothermal energy generated by its Vulcanod plant, another part of its plan to make the country the world’s friendliest cryptocurrency.