El Salvador’s President Plans A ‘bitcoin City’ To Be Financed By Crypto Bonds

Having used the US dollar as a currency for two decades, El Salvador has become the first nation in the world to legalize bitcoin as a legal tender.

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El Salvador’s president Nayib Bukele said the country intends to establish the world’s first “Bitcoin City,” supported by a volcano and financed by cryptocurrency bonds.

Bukele said Bitcoin City ‘is gonna include everything: residential areas, commercial areas, services, museums, entertainment… airports, ports, rail lines’ at the Latin American Bitcoin and Blockchain Conference on Saturday.

 

El Salvador, a country that has been using the US dollar for two decades, was the first country in the world to legalize bitcoins as legal tender.

Bukele says the Conchagua volcano “will power the whole city as well as the mining.”

Using computers to solve complex mathematical problems, bitcoin mining is the process by which new bitcoins are created — a task that uses enormous amounts of power.

 

A geothermal plant fed by the Tecapa volcano provides some of that energy in El Salvador.

Initially, Bukele said, the city will be powered by the Tecapa plant before his government builds a new geothermal plant powered by Conchagua.

“This is an ecological city with no CO2 emissions,” 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 tech provider.

 

Mow said he would invest half of his volcano bonds in bitcoin, and half in infrastructure, when he took the stage with Bukele.

Mow predicted that El Salvador would be the financial center of the world.

 

Bitcoin City will only charge value added tax (VAT), according to Bukele.

 

“Zero income tax. Zero percent forever. Zero capital gains tax… zero property tax, zero payroll tax,” he said.

No timeline was given for Bitcoin City’s construction.

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