El Salvador Announces World’s First Bitcoin City, Backed By $1B Bitcoin Bonds
November 21 2021 - 3:00AM
NEWSBTC
El Salvador is currently the only country in which Bitcoin (BTC) is
legal tender. This move has witnessed many developments, as well as
some pushback. Amid protests, technical glitches, and inevitable
market volatility, El Salvador continues to drive BTC adoption.
Related Reading | There Are More People Using Bitcoin Wallets
Than Bank Accounts, Says El Salvador President In its latest
Bitcoin adoption move, the Central American country plans to build
a city based on the world’s largest cryptocurrency. President Nayib
Bukele announced the Bitcoin City initiative at El Salvador’s
Bitcoin Week conference on Saturday night. This conference is a
celebration of Bitcoin’s mainstream adoption in the country. In
partnership with crypto
firms Blockstream and BitFinex, Bukele plans to
issue $1 billion in tokenized USD-denominated 10-year bonds to fund
this project. The Proposed Bitcoin City Paolo Ardoino, Bitfinex
CTO, says the exchange will support the initiative by launching a
securities platform to hold the bonds. Blockstream Chief Security
Officer Samson Mow also clarified the feasibility of sourcing the
$1 billion Bitcoin bonds. “With Bitfinex, they have a lot of
whales. I don’t see a problem filling up a $1 billion bond.” In an
announcement by Blockstream, Mow also said that the $1 billion will
be split into two parts. $500 million will go towards building
energy and Bitcoin mining infrastructure in the region. The other
$500 million worth of BTC will be locked up for five years. Mow
further stated that after the five-year lock-up period, El Salvador
would start selling some of the bitcoin used to fund the bond to
give investors an “additional coupon,” “This is going to make El
Salvador the financial center of the world,” he said. BTC trading
at $58.866K | Source: BTCUSD on TradingView.com The Salvadoran
president additionally said that the bonds will be available in
2022. He plans on locating the proposed Bitcoin City near a
volcano. The idea, he said, is to provide energy for both the city
and bitcoin mining. According to Bukele, Bitcoin City will be a
full-fledged metropolis with residential and commercial areas. It
would also have shopping centers, restaurants, a port, an airport,
and railway services. There would be no income, property, capital
gains, or payroll taxes. Residents would, however, be subject to
just value-added tax (VAT). This tax will go towards paying for the
municipality’s bonds, public infrastructure, and city maintenance.
“In #BitcoinCity, we will have digital and technological education.
Geothermal energy for the entire city and efficient and sustainable
public transport” said Bukele. El Salvador’s Infrastructure
Development Projects After El Salvador adopted Bitcoin as legal
tender, the government started reinvesting unrealized profits into
several projects. Earlier this month, the government announced its
plans to use some of the profits from its Bitcoin Trust to build 20
new schools. One of the purposes of these new facilities will be to
educate locals about how cryptocurrencies work. Related Reading
| New York Mayor Says Cryptocurrencies Should Be Taught In
Schools In October, President Nayib Bukele had announced plans to
use the profits for a new veterinary hospital. However, some
criticized this move, arguing that investment in medical facilities
for humans was more urgent. Featured image by Shutterstock, Chart
from TradingView.com
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