El Salvador to Build Cryptocurrency-Fueled ‘Bitcoin City’
LA LIBERTAD, El Salvador — In a rock concert-like atmosphere, El Salvador President Nayib Bukele announced that his government will build an oceanside “Bitcoin City” at the base of a volcano.
Bukele announced his latest idea to a crowd of Bitcoin enthusiasts on Saturday night. He also used an existing Bitcoin conference in Miami for that purpose.
Bukele claimed that the 2022 bond issue would be entirely done in Bitcoin. He wore his signature baseball cap backwards. Construction would start 60 days after the financing had been approved.
The city will be built near the Conchagua volcano to take advantage of geothermal energy to power both the city and Bitcoin mining — the energy-intensive solving of complex mathematical calculations day and night to verify currency transactions.
Already, the government has a pilot Bitcoin mining operation at an additional geothermal plant near Tecapa volcano.
Conchagua is an oceanside volcano that can be found in El Salvador, Gulf of Fonseca.
Government will help investors by providing land, infrastructure, and other support.
There will only be one tax: the value-added taxes. Half of these will go to municipal bonds, the other half for maintenance and infrastructure. Bukele claimed that the city will have no municipal, income, or property taxes. There would also be zero carbon dioxide emission.
With foreign investors in mind, the city will be constructed. Bukele stated that there would be areas for residential, shopping, and restaurants, as well as a port. He spoke about digital education, sustainable transportation and technology.
“Invest here and earn all the money you want,” Bukele told the cheering crowd in English at the closing of the Latin American Bitcoin and Blockchain Conference being held in El Salvador.
Bitcoin and the U.S. dollars have been legal tender since Sept. 7.
Bitcoin is supported by the federal government with $150 million. The government provided $30 in credit for those who used its digital wallet to encourage Salvadorans to adopt it.
Critics have warned that the currency’s lack of transparency could attract increased criminal activity to the country and that the digital currency’s wild swings in value would pose a risk to those holding it.
Bitcoin was initially created for use outside of government financial systems. Bukele believes it will attract foreign investment and lower the cost to send money back to El Salvador from abroad.
As Bukele moves to consolidate his power, there has been increased concern among Salvadoran observers and the opposition.
Voters gave the highly popular president’s party control of the congress earlier this year. The new lawmakers immediately replaced the members of the constitutional chamber of the Supreme Court and the attorney general, leaving Bukele’s party firmly in control of the other branches of government.
Responding, the U.S. government said that they would move their aid from government agencies to civil-society organizations. Bukele, who received foreign funds from the United States this month, proposed to Congress to require foreign agencies to be registered.