The government of The Savior is giving more weight to the issue Bitcoin: President Nayib Bukele has indeed unveiled plans to build one “Bitcoin City” near a volcano along the Gulf of Fonseca, between La Unión and Conchagua. The metropolis will have its own geothermal power plant to support cryptocurrency mining and there will be no capital gains, income, paychecks or property taxes, only value added tax.
El Salvador wants to build the Bitcoin City
The city will be shaped like a coin and, even if it should include all the services useful to the daily life of workers and residents, people in La Unión will be able to live the life of a commuter.
Bukele did not provide a precise timeline for the founding of the city, but presented in conjunction with the announcement a US $ 1 billion “Bitcoin bond” in which half would be used to build energy and mining infrastructure, while the rest would be used to buy more digital currency.
Samson Mow, strategy chief for bond developer Blockstream, explained that El Salvador will start selling holdings in cryptocurrencies after five years and pay an extra dividend to bond holders. With an initial yield of 6.5 percent, this could be a major boon to the country, assuming everything goes according to the president’s plans.
Bukele’s administration is counting on Bitcoin to stimulate economic growth, independence and investment, but this also assumes that the digital currency continues to maintain its high market value. Furthermore, It’s unclear whether would-be residents and investors will flock to a Bitcoin-oriented city even with tax incentives. Beyond these potential limitations, this is new territory for cryptocurrency and it is currently unclear whether there is enough government support for the project to succeed.