The crypto street has been interesting than ever before this year. As the industry is witnessing major developments and adoptions. Which could only take the market by a quantum jump to greater levels. The crypto street has been experiencing numerous adoptions, which is overwhelming for the community.
El-Salvador President Nayib Bukele has made announcements at an event that the nation seeks to build a “Bitcoin City”. Which will be the first in the world. The announcement has accompanied the crypto street with zeal and cheer.
Will El-Salvador’s Bitcoin City Be A City Of Dreams?
The proposed city is planned in the eastern region of La Union. The city would get geothermal power from the volcanoes. The Bitcoin city would be circular, with an airport, residential and commercial spaces. In addition, the city would also feature a central plaza with the design resembling that of a Bitcoin symbol from a birds-eye view. The estimation for the public infrastructure could cost around 300,000 Bitcoins.
Citizens of the city will incur 0% taxes in income, capital gains, property, payroll, and municipal tax. The initiative will be funded with a 10% VAT and Bitcoin bonds. Half of the VAT levied would be used to fund the bonds issued to build the city. The other half would pay for the services such as garbage collection.
The government plans to issue the initial bonds in 2022. The President mentions that it would happen within 60-days time. The first 10-year issue known as the volcano bond would be worth $1 billion, backed by Bitcoin carrying a coupon of 6.5%. Half of which will be for Bitcoin purchases. Post the 5-years lock-up period, the country will be selling some of the BTC holdings used to fund the bond to give investors an additional coupon.
The issuance of the bond will be done on the “Liquid network”, which is a Bitcoin side-chain network. Also, El-Salvador is also working towards securities law. The first license to operate would be given to Bitfinex.
Collectively the major move by El-Salvador will help Bitcoin and the crypto market, in general, thrive towards mainstream adoption. Enthusiasts have been hoping for more countries to adopt crypto as a legal tender. More such cities, will revolutionize the industry, and help propel mass adoption of the digital asset.