President of El Salvador, Nayib Bukele, has yet again doubled down on Bitcoin. Speaking at a Bitcoin promotion event on Sunday, Bukele announced plans to build the world’s first “Bitcoin City,” funded by Bitcoin-backed Bonds.
Planned in the eastern region of La Union, the move is seen as an attempt to harness Bitcoin to fuel investments in the region. The Bitcoin City, as proposed by Bukele, will get geothermal energy from a volcano and be free from any levies except Value Added Tax (VAT).
“Invest here and make all the money you want,” noted the tech-savvy president in an attempt to woo investments into the country. “This is a fully ecological city that works and is energized by a volcano.”
What is Bitcoin City? And How Does It Work?
Inspired by the cities founded by Alexander the Great, Bukele said, “If you want bitcoin to spread over the world, we should build some Alexandrias.” The planned city will be laid out in a circle like a coin with a massive city centre in the shape of a Bitcoin symbol.
And to fund the Bitcoin City project, Bukele unveiled Bitcoin Bonds, aka Volcano Bonds, worth $1 billion. Half of the funds raised ($500 million) will be used to build eco-friendly energy and mining infrastructure, while the other half will be used to buy more Bitcoins.
The country has roped in Blockstream, a blockchain technology provider, to issue 10-year period Volcano Bonds backed by Bitcoin at a coupon rate of 6.5%. The tokenized bond will be available to investors in small amounts as low as $100.
What Does This Move Mean To Bitcoin?
The Central American nation under the leadership of Nayib Bukele has become a crusader for Bitcoin adoption. Early September this year, El Salvador became the first country to adopt Bitcoin as a legal tender.
And ever since, the country has capitalized on dips and has bought a total of 1,120 bitcoins. More interestingly, El Salvador has used the profits made from Bitcoin purchases to fund a pet hospital and 20 new schools.
Today, El Salvador is making history by propelling bitcoin to the mainstream as a currency. The effect of which is being felt positively on the prices of Bitcoin as an asset.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
Table of content
Subscribe to Our Newsletter with exclusive content.