El Salvador, the first country to embrace Bitcoin (BTC) as legal tender, is planning to build a Bitcoin city at the base of Conchagua, a stratovolcano in southeastern El Salvador. Salvadoran President Nayib Bukele disclosed this news during the Latin American Bitcoin and Blockchain Conference on November 20. Allegedly, the city will be complete with residential and commercial sections, as well as an airport.
According to President Bukele, the city’s currency will be BTC, and it will levy no taxes apart from Value added tax (VAT). The pro-BTC president noted that half of the funds obtained from VAT go towards building up the city, and the other half would go towards keeping the streets neat and clean.
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Bukele further disclosed that the city’s construction would start in 2022. However, he did not offer specific dates for when the project would start or end. Nonetheless, he estimated that most of the public infrastructure would cost around 300,000 BTC.
The city will initially use power from the Tecapa plant, according to Bukele. However, El Salvador intends to build a new facility that taps into the volcano’s geothermal energy to power all city operations, including BTC mining.
Plans to issue the first sovereign BTC bond
El Salvador is also looking to raise $1 billion (£0.74 billion) in BTC by tying with Blockstream, a digital assets infrastructure company. Reportedly, the Salvadoran government intends to issue the first sovereign BTC bond to help secure these funds. Investors in the bond will get a special annual dividend.
According to the government, half of the funds from this initiative will go toward buying BTC. It will then use the remaining $500.00 million (£372.15 million) to fund energy and BTC mining infrastructure.
Per Samson Mow, Blockstream’s Chief Strategy Officer, the bond has a five-year lockup period, which would take $500 million (£372.15 million) worth of BTC off the market.
This news comes after El Salvador bought another 420 BTC on October 28 after BTC fell to around $58,000.00 (£43,170.85). Soon afterward, BTC rallied to set a new ATH at $68,789.63 (£51,201.84). However, the flagship crypto failed to maintain the bullish momentum and declined sharply.
At the time of writing, BTC is changing hands at $57,396.45 (£42,709.56) after losing 2.45% in the day. This figure represents a 12.91% drop over the past seven days and a 16.55% from the November 10 ATH.
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