Salvadoran President Plans To Fund ‘Bitcoin City’ With Crypto Bonds

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Published on: 11/21/2021 – 13:42 Modified: 11/21/2021 – 13:41

Mizata (El Salvador) (AFP) – President Nayib Bukele has said that El Salvador plans to build the world’s first “Bitcoin city”, powered by a volcano and funded by cryptocurrency bonds.

Bitcoin City “is going to include everything: residential areas, shopping areas, services, museums, entertainment … airport, port, railroad,” Bukele said at the Latin American Bitcoin and Blockchain conference on Saturday.

El Salvador, which has used the U.S. dollar for two decades, was the first country in the world to legalize bitcoin as legal tender.

Bukele said the Conchagua volcano “will power the whole town and also fuel mining.”

Bitcoin mining is the process by which new bitcoin is created using computers that solve complex mathematical problems – a process that requires enormous amounts of energy.

In El Salvador, part of this energy comes from a geothermal power plant powered by the Tecapa volcano.

Bukele said the city would initially be powered by the Tecapa power plant before his government built a new geothermal power plant powered by Conchagua.

“Zero CO2 emissions. It’s a completely green city,” Bukele told the crowd.

To fund the project, El Salvador will issue $ 1 billion “bitcoin bonds” in 2022, according to Samson Mow, chief strategy officer of Blockstream, a blockchain technology provider.

On stage with Bukele, Mow said half of the “volcanic bonds” would be invested in bitcoin and the other half in infrastructure.

“El Salvador will be the financial center of the world,” Mow said.

Bukele said Bitcoin City will only charge value added tax (VAT).

“We will have zero income taxes. Zero percent forever. Zero capital gains taxes … zero property taxes, zero payroll taxes,” he said.

No timetable has been given for the construction of Bitcoin City.

© 2021 AFP

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