El Salvador’s president, Nayef Bokla, announced on Saturday that El Salvador plans to create its first “Bitcoin City,” with initial funding from bitcoin-backed bonds.
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Speaking at the end of the Bitcoin promotion week in El Salvador, Bucla said that the city is scheduled to be built in the eastern province of La Union, and that the city will be supplied with geothermal energy from a volcano. . Also, no taxes other than VAT will be charged in the city. In a letter in English from the coastal city of Masata, he said: “Invest here and earn as much money as you want. It will be a completely eco-city. It works and receives energy from the volcano.”
He added that half of the value-added tax that will be collected will be used to finance the bonds that will be issued for the city’s needs, and the other half will be used to pay for services such as garbage collection. It is estimated that public infrastructure will rise to around 300,000 bitcoins.
In September, El Salvador became the first country in the world to adopt bitcoin as an official currency. Although Bukala is considered a popular president, public opinion polls in the country indicate a high level of skepticism about his fondness for bitcoin, and the faltering launch of the cryptocurrency has led to protests against the government. However, Pokla compared his plan to the cities founded by Alexander the Great. He said the city will include an airport, residential and commercial areas. It will also include a central square that will be modeled after the Bitcoin token.
“If we want bitcoin to spread around the world, we have to build some Alexandria,” Bokla stated. According to him, the state intends to launch the first bonds as early as next year and maybe even within 60 days.
The event was also attended by Samson Mao, chief strategist for blockchain technology provider, Blockstream. He said the 10-year bond, which would be called a “volcanic bond,” would be worth $1 billion and be backed by Bitcoin. Also, half of the sum they will raise, i.e. $500 million, will be used to purchase additional bitcoins and the other half will be used to build the required energy and bitcoin infrastructure. “This will make El Salvador the financial center of the world,” he stressed. The bonds will be issued in the “liquid network” dedicated to bitcoin, and El Salvador intends to enact a new securities law and give BitPinks Securities the license to manage the offering and operate the bond trading platform.
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