El Salvador’s Bitcoin-friendly president, Nayib Bukele, declared on Saturday during a Bitcoin investment meeting that his nation aims to construct the first “Bitcoin City.”
The city will be situated between the towns of La Unión and Conchagua in the eastern department of La Unión. The first expenses of creating the so-called “Bitcoin City” will be covered by the issue of billion-dollar bonds backed by Bitcoin in 2022.
Bitcoin’s maximum value Bukele delivered his speech in person at the end of a week-long Bitcoin conference in El Salvador. Some high-budget production and pyrotechnics were used to announce his arrival.
They definitely didn’t skimp on the production budget for Bukele’s entrance — Metaverse avatar and all pic.twitter.com/VwspEggmLe— Sarah Kinosian (@skinosian) November 21, 2021
Bitcoin City, Bukele informed the gathering, would be powered by geothermal energy from neighboring volcanoes and will be tax-free save for value-added tax (VAT). Said Bukele: ” Invest here and make all the money you want. This is a fully ecological city that works and is energized by a volcano.”
According to Bukele, half of the money earned via VAT would be used to pay off debts issued to support the city’s initial expenditures, while the other half will be utilized to fund public services.
The specific nature of Bukele’s “Bitcoin city” is unknown, but the leader intends to attract international Bitcoin investment. “If you want bitcoin to expand over the globe, we need to create some Alexandrias,” he remarked.
Bukele drew up a rough outline of the city’s geography, stating that it would be circular and include an airport as well as residential and commercial sections. He also said that from above, the center plaza would resemble the Bitcoin sign.
El Salvador has made agreements with Blockstream and iFinex to issue the bonds. The government’s bookrunner will be iFinex, which will assist in the creation of new digital tokenized securities legislation. The government will subsequently grant iFinex the first license under this new legal framework, allowing it to issue billion-dollar bonds backed by Bitcoin on Bitfinex securities.
At the ceremony, Blockstream’s CSO, Samson Mow, revealed that the bonds would be issued on Blockstream’s Liquid Network.
El Salvador’s acceptance journey, from legal tender to Bitcoin City
El Salvador adopted Bitcoin legal money on September 7 of this year, despite strong resistance from the political opposition and widespread distrust from the general public. El Salvador’s embrace of Bitcoin, according to Ethereum inventor Vitalik Buterin, is “contrary to the objectives” of cryptocurrency.
“This technique of pushing BTC to millions of individuals in El Salvador at the same time with practically no effort at previous education is dangerous, and risks a big number of innocent people being hacked or conned,” Buterin said in a blog post. “Bitcoin maximalists should be ashamed.”
But it hasn’t all been negative feedback. Bukele’s outspoken Bitcoin maximalism has gained him admiration from other maximalists such as MicroStrategy CEO Michael Saylor and crypto podcaster Peter McCormack.
Welcome to #Bitcoin @nayibbukele. No force on earth can stop an idea whose time has come. https://t.co/EWHqnEZWbQ— Michael Saylor⚡️ (@saylor) June 6, 2021
Despite the widespread criticism, Bukele has forged on with his Bitcoin adoption plans. Bukele said on October 1 that El Salvador has begun mining Bitcoin using geothermal energy. El Salvador recorded a $4 million excess in its Bitcoin trust last month, owing to the currency’s increased value. Bukele said that he would use the funds to construct a pet hospital.
El Salvador’s Bitcoin adoption process has partnered with Strike, and on October 14, El Salvadorans noticed a new “Pay Me with Bitcoin” function that converts direct bank transfers into Bitcoin.
Bukele took advantage of a drop in Bitcoin prices at the end of last month to add 420 additional Bitcoins to El Salvador’s treasury, bringing the country’s total Bitcoin holdings to 1,120 BTC.
