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El Salvador — the first country in the world to adopt Bitcoin as legal tender in September — plans on building the world’s first “Bitcoin City,” an entire city to be funded by Bitcoin bonds and powered by geothermal energy from one of the country’s many volcanoes, according to El Salvador’s official presidential Twitter page.
Fast facts
- Speaking at a weeklong event promoting Bitcoin in the country, President Nayib Bukele said the oceanside city will help fuel investment in El Salvador and will feature an airport, residential and commons areas with a central plaza designed to resemble the Bitcoin symbol from the air.
- “Invest here and make all the money you want,” said Bukele, likening the plan to cities founded by Alexander the Great. “If you want Bitcoin to spread over the world, we should build some Alexandrias.” Bukele caused controversy recently when he apparently jokingly called himself the “dictator” of El Salvador on Twitter. Either way, the stunt was not well received in the country where there is growing dissatisfaction with Bukele’s apparent consolidation of political power.
- The city is estimated to cost 300,000 BTC (the equivalent of US$17.224 billion, according to CoinMarketCap) with the initial bonds expected to be issued in 2022 in roughly 60 days’ time. The city would not levy tax aside from value added tax; half of the money raised this way would be used to fund the bonds used to build the city, and the other half would be used to pay for services such as garbage collection.
- Also speaking at the event, chief strategy officer for blockchain technology provider Blockstream, Samson Mow, explained the first 10-year issue would be worth US$1 billion, backed by Bitcoin and carrying a coupon of 6.5%. Half of the sum from the bonds, known as the “volcano bond,” would go to buying Bitcoin on the market, with other bonds to follow. El Salvador is currently working on a securities law to enable this process and the first license to operate an exchange is expected to go to Bitfinex.
- “This is going to make El Salvador the financial center of the world,” Mow said at the event.
- Forkast.News spoke with Mow shortly after El Salvador approved the Bitcoin as legal tender bill in July, where he said that he expects Bitcoin’s adoption to continue in El Salvador and beyond. “I believe that Bitcoin is going to be just simply money in the future, and to get there is going to swallow up all fiat currencies — bonds, gold, everything like that. So, it’s just going to become money and it’ll just be ubiquitous, he said.