El Salvador Declares the First Bitcoin City in the World, Backed by $1 Billion in Bitcoin Bonds
Currently, El Salvador is the only country where Bitcoin (BTC) is legal tender. Many changes have occurred as a result of this initiative, as well as some opposition. El Salvador continues to boost BTC adoption despite protests, technical problems, and unavoidable market volatility.
The Central American country’s latest Bitcoin adoption initiative is to develop a metropolis based on the world’s largest cryptocurrency. On Saturday night, President Nayib Bukele introduced the Bitcoin City plan at El Salvador’s Bitcoin Week conference. This event is a celebration of Bitcoin’s general acceptance in the United States.
To fund the project, Bukele wants to issue $1 billion in tokenized USD-denominated 10-year bonds in collaboration with crypto businesses Blockstream and BitFinex.
Bitcoin City’s Proposed Location
The exchange will support the endeavor, according to Bitfinex CTO Paolo Ardoino, by developing a securities platform to house the bonds.
Samson Mow, Blockstream’s Chief Security Officer, highlighted the possibilities of obtaining the $1 billion Bitcoin bonds.”They have a lot of whales with Bitfinex.” I do not think it will be difficult to fill a $1 billion bond.”
Mow also stated that the $1 billion will be split into two portions in a Blockstream announcement. In the region, $500 million will be spent on electricity and Bitcoin mining infrastructure. The remaining $500 million in BTC will be held in escrow for five years. El Salvador would start selling some of the bitcoin used to buy the bond after the five-year lock-up period to give investors an “additional coupon,” according to Mow.
“This will make El Salvador the world’s financial center,” he said.
The bonds will be available in 2022, according to the Salvadoran president. He wants the prospective Bitcoin City to be built near a volcano. He explained that the plan is to supply energy to both the city and bitcoin mining.
Bitcoin City will be a full-fledged metropolis with residential and commercial sections, according to Bukele. Shopping malls, restaurants, a port, an airport, and train services would all be available. Income, property, capital gains, and payroll taxes would all be eliminated. Residents, on the other hand, would only be liable to value-added tax (VAT). This tax will be used to cover the cost of municipal bonds, public infrastructure, and city maintenance.
We will offer digital and technology education in #BitcoinCity. Bukele stated, “Geothermal energy for the entire city, as well as efficient and sustainable public transportation.”
Infrastructure Development Projects in El Salvador
Following the adoption of Bitcoin as legal cash in El Salvador, the government began reinvesting unrealized gains into a variety of projects.
The government said earlier this month that it will use some of the proceeds from its Bitcoin Trust to fund 20 new schools. One of the goals of these new institutions will be to educate residents about cryptocurrency.
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