El Salvador reveals plans for Bitcoin City

El Salvador’s President Nayib Bukele has mooted plans to build an entire city funded by and dedicated to Bitcoin (BTC).

Speaking during a presentation at Bitcoin Week in El Salvador, Bukele outlined his plans for a future where BTC would become more deeply intertwined with the country’s economy and finances.

El Salvador became the first country in the world to launch BTC as legal tender back in September.

The experimental “Bitcoin City” will be built along the Gulf of Fonseca near one of the volcanos where the government will construct a power plant and use residual heating from the volcano to power BTC mining operations, Bukele explained in his address.

Bukele expects Bitcoin City to be a first-of-its-kind, but also feature everything visitors would need to enjoy the city, including commercial areas, an airport, rail services and restaurants.

The city itself will resemble a physical copy of BTC, shaped like a coin and in the center, it will feature the currency’s symbol.

Interestingly, and perhaps more attractively, Bukele will not expect residents to pay capital gains, payroll taxes or anything else.

He said there would be no property and no income. To realize the plan, Bukele will use a tokenized financial instrument by Blockstream, known simply as a Bitcoin bond worth $1bn.

The government is planning to split the bond into two and use half of it to purchase more BTC, beefing up the country’s supply to approximately 2,000 BTC in total.

The bond will be equal to a 10-year US dollar bonds with an initial 6.5% pay. Once a lock-up period of five years is over, El Salvador will begin selling its crypto holdings to offer dividends to bond holders.

El Salvador is thinking strategically ahead as a country, it seems, as taking away some of the BTC supply and locking it up should help with the currency’s appreciation.

In the meantime, you can choose to hold to your Bitcoin or spend them recreationally. Crypto casinos such as 1xBit, FortuneJack and Bitcasino are all great spots.

Source

Updated: 11/22/2021 — 13:00

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