El Salvador announces a $1B Bitcoin City Construction
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El Salvador’s president, Nayib Bukele, has declared that he will issue a $1 billion ” Bitcoin Bond” to fund the construction of the world’s first Bitcoin City.
There would be no taxes other than VAT, and it would be carbon neutral because the majority of its energy would come from geothermal sources.
El Salvador, according to Nayib, would team up with Blockstream and issue the bond over its liquid network.
This statement was made by Bukele at the concluding event of Labitconf, a Lamtam-based Bitcoin convention.
This construction will become the world’s first Bitcoin City, and it will be situated in the country’s eastern region.
Furthermore, this new bond is the next stage in integrating bitcoin into the lives of the citizens.
The city’s residents would likewise be exempt from paying any taxes, in respect to this, Bukele commented on this, saying, “Invest here and make all the money you want.” This is a fully eco-friendly metropolis that is powered by a volcano”.
The city’s only taxation will be a value-added tax, which would be used to finance the city’s development using bonds and to preserve services and infrastructure.
Bukele gave a sneak-peek into Bitcoin City’s layout, displaying a circular model with a central plaza bearing the bitcoin logo.
Also read, El Salvador includes an Extra 150 Bitcoin
The tokenized bonds will be issued atop Blockstream’s Liquid blockchain, a federated sidechain, which will be administered by Blockstream, a bitcoin services firm.
The $1 billion targets for the effort will be split into two sections. The first $500 million would be used to acquire a $500 million bitcoin allocation, with the remaining $500 million going into bitcoin-specific mining and energy infrastructure.
According to Blockstream’s CSO Samson Mow, this blockchain-enabled bond would be accessible to a multitude of people across the globe who will be likely to invest in small sums as low as $100.
Dividend payments will be distributed to bondholders quickly and easily utilizing tools built on top of the Liquid network.
The country must pass a new securities law and give Bitfinex, the exchange chosen to manage the operation, permission to conduct the bond offering.
This is simple for Bukele because his party, New Ideas, controls the majority of the country’s legislative power. So, in the case of the Bitcoin City idea, this is only a formality.
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