El Salvador to build cryptocurrency-fueled “Bitcoin City”

LA LIBERTAD, Nov. 22 (BUS): In a rock concert-like atmosphere, El Salvador’s President Neb Bukele announced that his government will build a “Bitcoin City” on the ocean at the base of a volcano.

Bukele used a group of Bitcoin enthusiasts Saturday night to launch his latest idea, just as he previously used a Bitcoin conference in Miami to announce in a video message that El Salvador will be the first country to submit legal tender for cryptocurrencies, The Associated Press (AP) reported.

Bukele said the bond offering will take place in 2022 entirely in bitcoin, wearing a baseball cap with his inverted signature. After 60 days of funding readiness, construction will begin.

The city will be built near the Conchagua volcano to take advantage of geothermal energy to power both the city and bitcoin mining – an energy-intensive solution to complex mathematical calculations day and night to verify currency transactions.

The government is already running a bitcoin mining pilot project at another geothermal power plant beside Tekapa volcano.

The oceanic volcano of Conchagua is located in southeastern El Salvador on the Gulf of Fonseca.

The government will provide land and infrastructure and work to attract investors.

The only tax collected there will be value-added tax, half of which will be used to pay municipal bonds and the rest for municipal infrastructure and maintenance. There will be no property, income or municipal taxes, Bukele said, and the city will be zero carbon dioxide emissions.

The city will be built with attracting foreign investment in mind. Bukele said there will be residential areas, malls, restaurants and a port. The Chair spoke about digital education, technology and sustainable public transport.

“Invest here and earn all the money you want,” Bukele told the cheering audience in English at the conclusion of the Latin American Bitcoin and Blockchain Conference held in El Salvador.

Bitcoin has been legal tender alongside the US dollar since September 7.

The government backs Bitcoin with a $150 million fund. To incentivize Salvadorans to use it, the government has offered a $30 credit to those using its digital wallet.

Critics have warned that the currency’s lack of transparency could attract increased criminal activity to the country and that extreme fluctuations in the value of the digital currency would pose a risk to those who hold it.

Bitcoin was originally created to operate outside government-controlled financial systems, and Bukele says it will help attract foreign investment to El Salvador and make it cheaper for Salvadorans living abroad to send money to their families.

Concern has grown among the Salvadoran opposition and outside observers this year as Bukele moved to consolidate his power.

Voters gave the president’s hugely popular party control of the convention earlier this year. The new lawmakers immediately replaced the members of the Constitutional Chamber of the Supreme Court and the attorney general, leaving Bukele’s party firmly in control of the other branches of government.

In response, the US government said it would shift its assistance from government agencies to civil society organizations.

This month, Bukele sent a proposal to Congress requiring organizations that receive foreign funding to register as foreign agents.

MI