SAN SALVADOR (Dispatches) - El Salvador’s president, Nayib Bukele, has announced plans to build a ‘Bitcoin City’ that will be funded initially by Bitcoin-backed bonds, doubling down on his bet to harness the cryptocurrency to fuel investment in the country.
The world’s first city of the kind is set to appear near the Conchagua volcano in southeastern El Salvador, and will reportedly have residential and commercial areas, services, entertainment, restaurants, and even an airport.
According to the announcement made at the event closing a week-long promotion of Bitcoin in the Central American country, the new city will receive geothermal energy from the volcano and not levy any taxes, except for VAT.
“Invest here and make all the money you want. This is a fully ecological city that works and is energized by a volcano,” Bukele said.
The head of state also stated that half of the VAT levied would be used to fund the bonds issued to build the city, while the other half is projected to pay for public services. Bukele expects public infrastructure to cost 300,000 Bitcoins ($17.2 billion).
A bond offering will reportedly happen in 2022, entirely in Bitcoin, and construction is set to begin 60 days after financing is ready.
El Salvador is also planning to raise around $1 billion through a ‘Bitcoin Bond’ in partnership with Canadian blockchain technology provider Blockstream. Half of the funds will reportedly be used to purchase Bitcoin, while the other $500 million will go toward energy and Bitcoin mining infrastructure.
In June, El Salvador became the world’s first country to accept Bitcoin as legal tender. However, not everyone in the country has supported the move. In September, thousands of people took to the streets across the country to march against the legislation, saying that legalization of cryptocurrency might attract increased criminal activity and lead to instability.