El Salvador President, Nayib Bukele Unveils Bitcoin City

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El Salvador President, Nayib Bukele Unveils Bitcoin City
El Salvador President, Nayib Bukele Unveils Bitcoin City

The President of El Salvador, President Nayib Bukele, has revealed that the nation plans to build an entire city based on the trillion-dollar cryptocurrency asset, naming it, ‘Bitcoin City.’

 

According to President Nayib Bukele, the new city will be located along the Gulf of Fonseca, near a volcano. He stated that the government plans on locating a power plant by the volcano to provide energy for both the city and Bitcoin mining.

 

In the President’s Statement, “In #BitcoinCity we will have digital and technological education. Geothermal energy for the entire city and efficient and sustainable public transport.”

 

Bitcoin City will be a “full-fledged metropolis with residential and commercial areas, restaurants, an airport as well as a port and rail service.”

 

The city will be laid out in a circle (like a coin) and in the city centre will be a plaza that will be host to a huge Bitcoin symbol. He further added that the city will have no income, property, capital gains or payroll taxes.

The president also mentioned the Latin American nation’s plan to issue a $1 billion Bitcoin bond, which will be a tokenized financial instrument that will be developed by Blockstream on the Liquid Network.

According to a press release by Blockstream, “The $1 billion US raised will be split between a $500M allocation of Bitcoin (BTC) and a $500M infrastructure spend for building out energy and Bitcoin mining infrastructure in the region.”

 

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The press release also mentioned the distribution of a special dividend. It stated, “The Bitcoin Bond will have special dividends dispersed on an annual basis generated by the staggered liquidation of Bitcoin. Using Blockstream’s Asset Management Platform (AMP), dividends are easily paid out to bondholders.”

 

Blockstream’s chief security officer, Samson Mao, explained that sourcing for the $1 billion Bitcoin bonds will not be a problem. He stated, “With Bitfinex, they have a lot of whales. I don’t see a problem filling up a $1 billion bond.”

 

Samson Mao also stated that the Bitcoin bonds will be subject to a five-year lock-up period, effectively taking the invested capital out of the global circulation. In addition, he explained how a 10 fold increase in similar initiatives from other countries will eventually take half of Bitcoin’s 21 million market capitalization out of circulation.