El Salvador reveals plans to build Bitcoin city

midian182

Posts: 7,427   +65
Staff member
In brief: Not content with being the first country to accept Bitcoin as legal tender, El Salvador plans to build an entire city based around the cryptocurrency. It will have a coin-like circular shape, of course, and be placed at the base of the Conchagua volcano to utilize geothermal energy for powering the city and its Bitcoin mining operations.

El Salvador president Nayib Bukele unveiled plans to build the "Bitcoin City" along the Gulf of Fonseca, between La Unión and Conchagua. Speaking at a promotional Bitcoin event in the coastal town of Mizata late on Saturday, Bukele said it would include residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, rail – "everything devoted to Bitcoin."

In the center of this crypto-metropolis will be a plaza featuring a huge Bitcoin symbol. Moreover, the city will have no income, property, capital gains, or payroll taxes, just value added tax. Bukele said revenue gained from this would be used to "to build up the city," while the rest would be used to keep the streets "neat and clean," reports the BBC.

Bukele never gave a timeframe for the city's construction, though he did say that most of the public infrastructure would cost around 300,000 Bitcoins, which, at BTC's current price, would be equal to $17.2 billion. The president also revealed plans to issue a $1 billion US "Bitcoin bond" developed by Blockstream. Half the money will go toward energy and bitcoin mining infrastructure, and half used to buy more Bitcoin, bringing the total number of Bitcoins EL Salvador owns to just under 2,000.

Blockstream's chief strategy officer Samson Mow said the bonds, known as "volcano bonds," would be worth $1 billion, backed by Bitcoin, and carry a coupon of 6.5% initially. El Salvador will start to sell some of its cryptocurrency holdings after a five-year lockup and pay an extra dividend to bondholders. "This is going to make El Salvador the financial center of the world," said Mow.

Once 10 volcano bonds were issued, $5 billion in Bitcoin would be taken off the market for several years, said Mow via Reuters. "And if you get 100 more countries to do these bonds, that's half of Bitcoin's market cap right there."

El Salvador became the first country to adopt Bitcoin as an official currency in early September. Things didn't go quite as planned when BTC's price fell by $10,000, but Bukele took advantage of the drop to buy the dip and purchase 150 more Bitcoins. There were also problems with the country's wallet system on its debut.

El Salvador has already started mining BTC using clean, zero-emission geothermal power generated by its "Volcanode" plant, another part of its plan to become the most crypto-friendly country in the world.

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merikafyeah

Posts: 268   +219
Personally I think history will remember that El Salvador was ahead of the curve on this one. Naturally all the naysayers have spent too long a life under the thumb of the Fed to truly grasp what economic freedom actually looks like. These same people probably believe that their IRAs and 401Ks are actually safe from being devalued.
 

BadThad

Posts: 809   +944
El Salvador is a horrible country which is why people are fleeing in mass. When this fantasy collapses, it will only hurt them worse.
 

Tawhid

Posts: 13   +5
He is doing best thing, world will remember him in decades to come... I know my country said no to submarine cable in 90s for bullshit security reasons and we are still suffering with the speed... if you are ahead of the game you might be facing lots of hardship during development phase but later you will be ahead of everyone else...
 

wiyosaya

Posts: 6,957   +5,469
Hmmm. No timeline for it being built? I wonder what that means? Probably just blowing hot air out his orifices so that his citizens think he is doing something in their best interests.
 

BuckarooBonzai

Posts: 38   +19
Considering the corruption in politics and how much the criminal gangs have influence in politics, we'll see how far this will go. But then what a great way to monetize the criminal gangs.
 

Danny101

Posts: 1,997   +830
Personally I think history will remember that El Salvador was ahead of the curve on this one. Naturally all the naysayers have spent too long a life under the thumb of the Fed to truly grasp what economic freedom actually looks like. These same people probably believe that their IRAs and 401Ks are actually safe from being devalued.
Noted, but I like real currency. Metallic currency. But you may be right. Getting away from the Fed cartel is a good thing.