After adopting Bitcoin as a fiat currency on September 7, the government of El Salvador is now ready to take the next step: creating the first “Bitcoin City”.
This will be financed by bonds backed by cryptocurrencies.
This was announced by President Nayib Bukele at an event dedicated to promoting Bitcoin in the country.
“We will start raising funds in 2022, bonds will be available in 2022,” said Nayib Bukele.
A city devoted to Bitcoin
The city will rise in the east of the country and will receive its energy supply from the Conchagua volcano.
The volcano is expected to provide energy for the entire city and will also fuel the energy-intensive mining activities.
The city will not be subject to any tax other than VAT.
"Residential areas, shopping areas, services, museums, entertainment, bars, restaurants, airport, port, railway - everything is devoted to Bitcoin" detailed Nayib Bukele.
Samson Mow, CEO of Blockstream, a company that provides the blockchain technology on which Bitcoin is based, explained that El Salvador will issue a first billion dollar bond to start raising the funds needed to build the city. .
This bond will have a 10-year maturity and will be divided into two parts.
Half of the funds will be converted into Bitcoins and the other half will be used for infrastructure and Bitcoin mining.
For the issue, the government selected the cryptocurrency exchange company Bitfinex.
The placement is expected to end by the end of January 2022.
Concerned residents
The IMF for its part warned El Salvador against the risks of Bitcoin: "Given the high volatility of Bitcoin, its use as an official currency generates significant risks for consumer protection, for the integrity of the system. financial and for financial stability.
Bitcoin should not be adopted as the official currency.
"
Finally, the newspaper
Le Monde
reveals that three quarters of the inhabitants of the country fear the instability and inflation caused by the volatility of this currency.
The creation of this city is therefore likely to take place in a stormy climate.
World
Salvador: Demonstration against the establishment of bitcoin as legal tender
Culture
With a digital state currency, the authorities "will have a real-time view of everything we do with this money"
energy
Volcano
Salvador
Virtual currency
High-Tech
Bitcoin
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