Bitcoin City Announced in El Salvador, Powered by Volcanoes
El Salvador president Nayib Bukele, announced yesterday at the closing event of Labitconf, a Latam-based Bitcoin conference, that the country will start the construction of the first Bitcoin City in the world. Funded with the issuance of a $1 billion Bitcoin Bond the country is taking another giant step towards further integration of bitcoin into the lives of its citizens.
This city is planned at the east of the country, and will be powered by geothermal energy, provided by volcanos. Also, Bitcoin City will not collect any taxes from its citizens. As Bukele said:
“Invest here and make all the money you want. This is a fully ecological city that works and is energized by a volcano.”
The city will however secure funds by imposing a value-added tax. This will be used to fund the construction of the city as well as maintain the infrastructure and public services.
At the announcement, Bukele revealed part of the city’s design. It will feature a central plaza with the Bitcoin symbol.
The only tax collected in the city would be a value-added tax, that will be used to fund the construction of the city with bonds and to maintain the public infrastructure and services. Bukele offered a glimpse into the design of the Bitcoin City, showing a circular model that will feature a central plaza with the bitcoin symbol.
The $1 billion that Bukele aims to raise via bonds, will be managed by Blockstream, a Bitcoin service company. Tokenized bonds will be issued on top of its its Liquid blockchain, a federated sidechain.
The first $500 million raised will be used to purchase Bitcoin while the second $500 million goes to Bitcoin-specific mining and power infrastructure.
There is just one formality left. A new securities law will need to pass to allow Bitfinex, the exchange selected to guide the process, to organize the issuance of bonds. With Bukele’s party controlling the legislative power in the country, this should not be a concern.
The President of El Salvador announced last night his intention to build “Bitcoin City” that would rely on bitcoin-backed bonds.
Cities that realize they can fund themselves without relying on overreaching taxation will be unstoppable in the 21st century. pic.twitter.com/O13Mq1F8Dm
— Pomp (@APompliano) November 22, 2021
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Author: Peter Siu