El Salvador plans to create an entire city based on Bitcoin

The government of El Salvador puts even more of its weight behind Bitcoin. Coindesk i BBC News report President Nayib Bukele has discovered plans to build “Bitcoin City” near a volcano along Fonseca Bay, between La Unión and Conchagua. The metropolis will have its own geothermal power plant to support cryptocurrency mining, and there will be no taxes on capital gains, income, salaries or property taxes, only value added taxes.

The city will be in the shape of a coin. While it should include all the benefits you expect from the city, people in La Unión could travel to work for new development.

Bukele did not provide a time frame for the creation of the city. However, at the same time, he presented the American “Bitcoin bond” of one billion dollars, in which half will be used for the construction of energy and mining infrastructure, and the rest for the purchase of most of the digital currency. Blockstream bond development strategy chief Samson Mow said El Salvador would start selling cryptocurrencies after five years and pay an additional dividend to bondholders. With an initial yield of 6.5 percent, this could represent a significant contingency gain for the country if all goes well.

The move is a huge cube for a company with a gross domestic product of just over $ 24.6 billion in 2020. The Bukelean administration reckons Bitcoin will boost economic growth, independence and investment, but it also assumes that the monetary format will remain on an overall upward trajectory . It is also unclear whether potential residents and investors will flock to a bitcoin-oriented city even with tax breaks. This is new territory for cryptocurrencies and it is not certain whether there is enough support to help the project progress.

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