El Salvador plans 'Bitcoin City,' powered by crypto bonds and volcano
El Salvador is doubling down on its bet on $Bitcoin(BTC.CC$, detailing plans to build a modern Alexandria called "Bitcoin City." The metropolis would be circular, with an airport, residential and commercial areas, and feature a central plaza designed to look like a Bitcoin symbol from the air. Geothermal energy would be provided from the Conchagua volcano in southeastern El Salvador, while the city would not levy any taxes (property, income or capital gains) except for VAT.
Flashback: In June, El Salvador passed a law making it the first country in the world to accept Bitcoin as legal tender, while the plan took effect in September with the launch of the Chivo Wallet, a government sponsored digital wallet designed to facilitate transactions. Despite the hype, dollars remain by far the main medium of exchange, as well as the currency coming into the country. In September and October, Salvadoreans abroad sent only $32M in remittances back home using the Chivo Wallet, representing about 2.5% of the total remittances.
"This is going to make El Salvador the financial center of the world," President Nayib Bukele declared. "Invest here and make all the money you want... This is a fully ecological city that works and is energized by a volcano." See the full speech at #FeelTheBit.
Construction of "Bitcoin City" will begin in 2022 and will be funded initially by sovereign bonds backed by the cryptocurrency. The first 10-year issue would be worth $1B, and carry a coupon of 6.5%, with half of the sum going to buy Bitcoin on the market and the other half used for infrastructure and Bitcoin mining. After a five year lock-up, El Salvador would start selling some of the Bitcoin used to fund the bond to give investors an "additional coupon," and other bonds would follow.
Volatility watch: Bitcoin has slipped about 16% from its record high of $68,990 which it reached earlier this month, but it is still up more than 90% this year. At the time of writing, Bitcoin is down 2.6% to $57,596
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wild horse : I give El Salvador credit for out of the box thinking. Combining crypto with volcano is a recipe for "explosive" growth.
Milenko : 5th poorest country in North America.
40% of the population below the poverty line.
Less crapcoin headlines and more fixing actual issues.
T_shares Milenko: Actually El Salvador is in Central America. There are only 2 countries in North America.
EEC6iRWd4p T_shares: There is no continent of "Central America." It's part of North America (a continent like South America).
TvhXCjkODq T_shares: Please don't confuse a SA reader with something as mundane as geography.
vYcu5FgULx T_shares: There are 23 countries in North America, including El Salvador. There are also about 25 territories and dependencies.
rvsESOg2h3 T_shares: Three
Ft7foG07XE T_shares: Three: Canada, United States of America and United States of Mexico.
hard working : Fast forward 500 years. Explores continue to look for the lost city of Bitcoin. Explorers hope to find the remains of a thumb drive with millions of stolen passwords.
where is my money : The 0% tax on income, capital gains, and only a 12% sales tax may actually pull some companies there.
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