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President of El Salvador plans to build Bitcoin City with the help of crypto bonds

President of El Salvador plans to build Bitcoin City with the help of crypto bonds

The President of El Salvador, Nayib Bukele, has revealed plans to construct a city run on the Bitcoin cryptocurrency. The first of its kind, it will aptly be called Bitcoin City.

El Salvador has joined the ranks of notable names in the cryptocurrency world. The Central American country was the first to make Bitcoin a legal tender, a big win for the crypto world. El Salvador has also been using the US dollar as its currency for the past two decades.

The process of building the city, which, according to the President, “will contain residential areas, commercial areas, services, museums, entertainment…airport, port, [and] rail,” will be a unique one.

While admitting that there isn’t a timeline for building Bitcoin City, Bukele revealed that the Conchagua stratovolcano “will power the whole city and will also power the mining.”

Bitcoin mining is the process where computers capable of handling complex algorithms and mathematical puzzles are used to create new Bitcoin. It has become famous for consuming large amounts of energy.

The Tecapa stratovolcano, from which a geothermal plant was built, has supplied all of El Salvador’s energy for Bitcoin mining. But with plans for Bitcoin City, Bukele said that his government plans to build a new geothermal plant powered by the stratovolcano.

For context, a geothermal plant is used to generate electricity through geothermal energy.

Bukele further expressed his pride that, unlike the rising concerns about the effect of Bitcoin mining on the environment, the city will be “a fully ecological city,” with zero CO2 emissions.

El Salvador plans to fund the project by issuing $1 billion in Bitcoin bonds. According to Samson Mow, Blockstream CSO, a blockchain tech provider, the plan is to invest half of the funds in Bitcoin and the other half in infrastructure for the city.

Optimistic about the city’s prospects, Mow added that it “will be the financial centre of the world.”

As a way to challenge the system of finance, Bukele said, “We will have zero income tax. Zero per cent forever. Zero capital gains tax…zero property tax, [and] zero payroll tax,” adding that Bitcoin City will only charge value-added tax (VAT).

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