El Salvador’s President Nayib Bukele has announced an ambitious proposal to build the world’s first Bitcoin City, exclusively financed by bitcoin-backed bonds at the moment. The latest development comes at the closing ceremony of the ‘Bitcoin Week’ in the Central American country where thousands of Bitcoin advocates descended to voice their support towards the crypto industry.
Revealing more on the plan, Bukele said the proposed city would be built in the country’s eastern region of La Union that will be powered by geothermal energy from a volcano with no additional tariff levied except for value-added tax [VAT]. Apart from that the half of the VAT proceeds would be utilized to fund the BTC bonds issued to finance the planned city. While the other half would be used for services like garbage collection. According to Bukele, the entire public infrastructure is estimated to cost nearly a whopping 300k BTC.
The president further divulged that El Salvador is planning to issue the bonds by next year and suggested that the entire exercise would be completed in a span of two months. Moreover, the bond is slated to be issued on the ‘Liquid Network’, a scalability solution built on top of the bitcoin main chain. To facilitate hassle-free implementation, the authorities are currently working on the securities legal aspect, and the first license to operate an exchange was granted to Bitfinex. Announcing the same, the crypto exchange posted the news on their Twitter handle.
El Salvador’s massive Bitcoin push
Apart from Bitfinix, El Salvador has also partnered with major crypto firm Blockstream to double up its efforts to fuel investment in the crypto coin market. The government plans to release $1 billion worth of bitcoin bonds via Blockstream‘s Liquid Network and the earnings from the bond issuance would be further utilized to support the development of the volcano-powered bitcoin mining program.
In a blog post, Blockstream stated that,
This bond offering is something we think will be attractive to a wide range of investors ranging from cryptocurrency investors, investors seeking yield, HODLers, and ordinary people.