Bitcoin cityDate: 24 November 2021 Tags: Miscellaneous
El Salvador is planning to build a complete city based on the Bitcoin cryptocurrency, President Nayib Bukele has announced during Bitcoin Week in the country.
El Salvador is the only country in the world that recognises the popular cryptocurrency Bitcoin as a legal tender.
The building of Bitcoin city will be funded through a $1 billion Bitcoin Bond. The city is set to be built near a volcano along the Gulf of Fonseca.
The government plans to spur economic growth by making use of Bitcoin. It can only happen if the price of the cryptocurrency remains stable.
The Bitcoin city
The city will be built in a circular manner similar to a coin. The city plaza at the centre will host a large Bitcoin symbol.
The geothermal energy present near the Conchagua volcano will be used to power both the city and cryptocurrency mining.
The city residents do not have to pay any income, property, capital gains or even payroll taxes. The objective of city would be to attract foreign investments.
The city will include residential areas, malls, port etc. The residents will have access to digital education, technology and sustainable public transportation.
Only the value-added tax will be collected from the resident. It will be used to pay off municipal bonds and the rest for municipal infrastructure and maintenance.
Out of the $1 billion Bitcoin bond, $500 million will be used to build energy and mining infrastructure and remaining for purchasing more Bitcoins.
People can invest in small amounts as low as $100 dollars. Dividends can be easily paid using tools deployed on top of the Liquid network.
After an initial five-year lock-in period, some of the Bitcoins will be sold to pay an additional coupon to investors.
Benefits for people
The country expects that the price of Bitcoin is expected to rise continuously. If it reaches $1 million in next five years, the government could sell some of these to give back dividends.