El Salvador plans “Bitcoin City” to raise $1 billion through “Bitcoin Bonds”

President Nayib Bukele of El Salvador, speaking at the closing ceremony of the Latin Bitcoin Conference (LaBitConf) on November 20, 2021 in Mizata Beach, El Salvador, stated that he announced at the meeting ” Bitcoin City”.

Marvin Resinos | AFP | Getty Images

The President of El Salvador, Nayib Bukele, announced on Saturday that El Salvador plans to build a “Bitcoin City” near the volcano, which will be funded by cryptocurrency.

The city will have residential and commercial areas, services, entertainment, restaurants and an airport, and will be built near the Conchagua Volcano in the southeast of El Salvador.

Construction will start in 2022 and the city will not levy taxes except for value added tax (VAT).

In June, El Salvador passed a law making it The first country in the world to accept Bitcoin as legal tender. But not all the population agree with this move.

In September, thousands of people took to the streets to protest the law, worrying that the introduction of cryptocurrency might lead to instability in this Central American country.

The country has also launched a Bitcoin wallet that allows citizens to use this cryptocurrency.

In addition, El Salvador plans to cooperate with Blockstream, a digital asset infrastructure company, to raise approximately $1 billion through “Bitcoin bonds.” The government stated that half of the funds will be used to purchase bitcoin, and the other 500 million US dollars will be used for energy and bitcoin mining infrastructure.

Mining is an energy-intensive process of creating new bitcoins by solving cryptographic puzzles. El Salvador said it plans to use the volcano’s geothermal energy to power it.

Samson Mow, the chief strategy officer of Blockstream, said that the bond has a five-year lock-up period and is designed to withdraw $500 million of Bitcoin from the market during this time.

Blockstream stated that investors in the bond will receive an annual special dividend.

Bitcoin It has fallen by about 16% from the historical high of $68,990.90 set earlier this month, but it is still up more than 90% this year.

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