The Republic of El Salvador plans on building the world’s first ‘Bitcoin City,’ funded by Bitcoin-backed bonds.
President Nayib Bukele, on Saturday at a Bitcoin promotional event, unveiled his plans to build a Bitcoin-powered city at the base of the Conchagua volcano along the Gulf of Fonseca in the eastern region of La Union.
The city will have its own geothermal power plant, harnessing the power of the volcano for crypto mining, becoming a fully ecological city.
President Bukele aims to create a city with no taxes, except value-added tax (VAT) that would “include everything.”
The VAT levied will be used to fund the bonds issued to build the city. While some of it will be used to pay for services such as garbage collection.
Bukele also unveiled a $1 billion ‘Bitcoin Bond’ where half of it would be used to build energy and mining infrastructure, while the rest will be utilized for buying more of the cryptocurrency.
Official dates for the construction or completion of such a city have not yet been announced. Bukele, however, pointed out that the infrastructure cost of such a city would be around 300,000 bitcoins.
The 40-year-old tech-savvy President compared his plans for the ‘Bitcoin City’ to cities founded by Alexander the Great, claiming that the city would be circular, complete with an airport, residential and commercial areas, featuring a central plaza, and would look like the Bitcoin symbol from above.
In September of this year, El Salvador became the first country to harness the full potential of Bitcoin by using it as a legal tender.
A new digital wallet app was also released by the government giving away $30 in Bitcoin to every citizen, with more than 200 new cash machines installed across the country. Despite these efforts, El Salvadorians remain skeptical regarding the transition.
The move presented the potential to boost economic growth and job opportunities. While many businesses were forced to accept Bitcoin as digital payment.
The latest move by President Bukele is a huge gamble for a country with a GDP of less than $24.64 billion. The administration’s initiative to switch from traditional monetary means to cryptocurrencies is highly dependent on the upward and stable growth of the cryptocurrency.
Finer details regarding the cryptocurrency-oriented city are still unclear, with the future of the city left hanging given that this is fairly new territory with not enough support to help the project thrive.