El Salvador builds ‘Bitcoin utopia’
El Salvador’s President Nayib Bukele has announced plans to build the first ‘Bitcoin City’.
Appearing at the week-long Bitcoin conference in El Salvador, Bukele explained that the city will rely on geothermal energy from nearby volcanoes, and be tax-free except for value-added tax (VAT).
“Invest here and make all the money you want. This is a fully ecological city that works and is energized by a volcano,” said Bukele.
Likening his plan to cities founded by Alexander the Great, Bukele said Bitcoin City would be circular, with an airport, residential and commercial areas, and feature a plaza designed to look like a Bitcoin symbol.
El Salvador plans to raise $1 billion via a ‘Bitcoin Bond’ in partnership with Blockstream’s Liquid Network. The $1 billion raised will be split between a $500m allocation of bitcoin (BTC) and $500m infrastructure spend for building out energy and Bitcoin mining infrastructure in the region.
After a five year lock-up, El Salvador would start selling some of the bitcoin used to fund the bond to give investors an “additional coupon.”
The only tax in the city will be a 10% value-added tax to help fund construction and pay for overhead down the road.
El Salvador aims to create a government securities law with the help of iFinex, and grant a license to Bitfinex Securities to process the bond issuance, which could pave the way for other Liquid security tokens like Exordium (EXO) and Blockstream Mining Note (BMN) to be listed on a regulated El Salvadorian securities exchange.
During a presentation with Bukele, Samson Mow, Chief Strategy Officer at Blockstream said El Salvador will become “the Singapore of Latin America,” making it the financial center of the world.
In September, El Salvador introduced Bitcoin as legal tender alongside the U.S. dollar. At the time, the government released a new digital wallet app, giving away $30 in Bitcoin to every citizen, in addition to installing over 200 new cash machines across the country.
“The future of financial products belongs on Bitcoin, and the Bitcoin Bond is the first step in achieving global inclusivity for finance; much like how Bitcoin created global inclusivity for money,” said Blockstream in a release.
Let us know your thoughts!