El Salvador announces the world’s first Bitcoin city, backed by a $1B Bitcoin bond

El Salvador is currently the only country that uses Bitcoin (BTC) as legal tender. This move has witnessed many developments and some resistance has also emerged. Amid protests, technical failures and inevitable market volatility, El Salvador continued to promote the adoption of BTC.

Related Reading | The President of El Salvador stated that more people use Bitcoin wallets than bank accounts

In its latest Bitcoin adoption initiative, the Central American country plans to build a city based on the world’s largest cryptocurrency. On Saturday night, President Nayib Bukele of El Salvador announced the Bitcoin City Plan at the Bitcoin Weekly Conference in El Salvador. This conference is a celebration of the mainstream adoption of Bitcoin in the country.

Working with crypto companies Block flow with Bitcoin, Bukele plans to issue a $1 billion tokenized dollar-denominated 10-year bond to fund the project.

Proposed Bitcoin City

Bitfinex Chief Technology Officer Paolo Ardoino said that the exchange will support the plan by launching a securities platform that holds bonds.

Samson Mow, Chief Security Officer of Blockstream, also clarified the feasibility of purchasing a $1 billion Bitcoin bond.
“For Bitfinex, they have a lot of whales. I don’t think there is a problem with filling the $1 billion bond.”

in a announcement Through Blockstream, Mow also stated that the $1 billion will be divided into two parts. US$500 million will be used to build energy and Bitcoin mining infrastructure in the region. Another $500 million worth of BTC will be locked for five years. Mow further stated that after the five-year lock-up period, El Salvador will begin to sell some bitcoins used to fund bonds to provide investors with “extra coupons.”
“This will make El Salvador the world’s financial center,” he said.

BTC trading at $58.866K | Source: BTCUSD on TradingView.com

The President of El Salvador also stated that the bonds will be issued in 2022. He plans to build the proposed Bitcoin City near the volcano. He said that the idea is to provide energy for cities and Bitcoin mining.

According to Bukele, Bitcoin City will become a mature metropolis with residential and commercial areas. It will also have shopping centers, restaurants, ports, airports and rail services. There are no income, property, capital gains or payroll taxes. However, residents only need to pay value added tax (VAT). The tax will be used to pay for municipal bonds, public infrastructure and urban maintenance costs.

“In #BitcoinCity, we will conduct digital and technical education. Geothermal energy throughout the city and efficient and sustainable public transportation,” said Bukele.

Infrastructure development projects in El Salvador

After El Salvador adopted Bitcoin as its legal tender, the government began to reinvest unrealized profits into several projects.

Earlier this month, the government announced plans to use part of the profits from its Bitcoin Trust Fund to build 20 new schools. One of the purposes of these new facilities is to educate locals about how cryptocurrency works.

Related Reading | The mayor of New York says cryptocurrency should be taught in schools

In October, President Nayib Bukele (Nayib Bukele) announced plans to use profits for a new veterinary hospital. But some people criticized this move, believing that it is more urgent to invest in human medical facilities.

Featured image by Shutterstock, Chart from TradingView.com

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