The cryptocurrency ecosystem is rapidly developing, and anyone who isn’t willing to accept the new norms will be left behind. Cryptocurrencies such as Bitcoin are not just virtual currency anymore and are as real as any Fiat money. The fact that the first-ever ‘Bitcoin City’ is currently being developed is a testament enough that cryptocurrencies are here to stay.
El Salvador has issued a $1 Billion Bitcoin bond to fund the Bitcoin City. President Nayib Bukele recently announced that El Salvador plans to build the first-of-a-kind Bitcoin City with no taxes except VAT which will be used to build the city. Moreover, the city would be carbon neutral and will utilize energy from geothermal sources. To make this monumental plan a success, El Salvador will partner with Blockstream to use its liquid network for the issuance of the Bitcoin bond.
Bitcoin City in El Salvador
This significant step of creating a city as a tribute to Bitcoin will result in further integration of Bitcoin into El Salvador’s citizens. Earlier this week, Nayib Bukele announced his plans at the closing event of Labitconf, a Latam-based Bitcoin Conference.
The city will be located at the east of the country and will be powered solely using geothermal energy. Speaking about the taxes of the city, Bukele stated,
“Invest here and make all the money you want. This is a fully ecological city that works and is energized by a volcano.”
The only tax collected, Value Added Tax, will be used for the construction of the city and to maintain public infrastructure and services. In the conference, Bukele also gave a glimpse of the city’s design that depicted a circular model with a central plaza decorated with the Bitcoin symbol.
Blockstream and Bitfinex as Supporters
The Bitcoin Bond will be issued by Blockstream, a Bitcoin-focused company and service provider. Blockstream houses a Liquid Blockchain which is a federated sidechain with its USP as tokenized bonds. The $1 Bond will be divided into two parts, with one half to be used for allocation of Bitcoin and the other to build Bitcoin-specific mining and power infrastructure.
One of the exciting things about the Bitcoin bond is that anyone can become a part of it with as low as $100 investment, according to Blockstream’s CSO Samson Mow. The corresponding dividends will be paid to the bondholders using Liquid Network’s tools.
For Bitcoin City to operate smoothly, El Salvador must approach new securities laws and allow BitFinex to lead the process. However, considering El Salvador’s stand on Bitcoin and its recent acceptance of Bitcoin legal tender, these approvals are mere formalities. It would be interesting to see how Bitcoin City will affect the cryptocurrency ecosystem and boost mass adoption.
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