El Salvador is poised to build the world’s first “Bitcoin City” which will be funded by bitcoin bonds, the Central American nation’s President Nayib Bukele said on Saturday.
The city, which is being planned in the east of the country, would get geothermal power from a volcano and not levy any taxes except for value added tax (VAT), Bukele said at an event organised to promote bitcoin in El Salvador.
“Invest here and make all the money you want,” Bukele said in the beach resort of Mizata. “This is a fully ecological city that works and is energized by a volcano.”
Half of the VAT levied would be used to fund the bonds issued to build the city, and the other half to pay for civic services such as garbage collection, Bukele said, estimating the public infrastructure would cost around 300,000 bitcoins.
“We’ll start funding in 2022, the bonds will be available in 2022,” Bukele said at the event.
Bukele said Bitcoin City would be circular, replete with an airport, residential and commercial areas, and feature a central plaza designed to look like a bitcoin symbol from the air.
Samson Mow, chief strategy officer of blockchain technology provider Blockstream, said El Salvador would initially issue the $1 billion ‘volcano bond’ backed by bitcoin and with a coupon of 6.5% to begin raising funds for the planned city.
El Salvador in September became the first country in the world to adopt bitcoin as legal tender.
- Kevin Hamlin and Reuters