El Salvador’s president, Naib Buckel, announced yesterday that he would issue a $ 1 billion “bitcoin bond” to build the world’s first bitcoin city. The city will have no taxes of any kind except VAT and it will be carbon neutral, most of the energy comes from geothermal sources. Buchel further announced that El Salvador would partner with Blockstream and use its liquid network to issue the aforementioned bonds.
Bitcoin City has been declared in El Salvador
El Salvador and its president, Naib Buckel, have taken the next step that will further integrate Bitcoin into the lives of its citizens. Bukele announced yesterday at the closing ceremony of the Labitconf, Latam-based Bitcoin Conference, the construction of the world’s first Bitcoin City to be financed by issuing $ 1 billion bitcoin bonds.
The city will be located east of the country, its infrastructure will be powered by geothermal energy. The city will also feature zero taxes for its citizens. In this regard, Buckle says:
Invest here and make all the money you want. It is a completely ecological city that works and is enlivened by a volcano.
The only tax collected in the city would be a value-added tax, which would be used to fund the construction of the city through bonds and to maintain public infrastructure and services. Buckle gives a glimpse of the design of Bitcoin City, showing a circular model that will show a central plaza with the bitcoin symbol.
Supported by Blockstream and Bitfinex
The bonds will be operated by Blockstream, a bitcoin service-oriented company, and tokenized bonds will be issued on top of its liquid blockchain, a federated sidechain. The 1 billion that the initiative aims to raise will be split into two. The first part will be used to buy the $ 500 million bitcoin allocation, and the second $ 500 million will be used to build bitcoin-specific mining and power infrastructure.
The tokenized bond will be available to many users around the world who will have access to even a small investment of up to $ 100, according to a statement from Blockstream CSO Samson Moo. Dividends will be easily paid to bondholders using the tools placed on top of the liquid network.
The country needs to approve a new securities law and allow Bitcoin, the selected exchange to lead the process, to issue bonds. This is easy for Buchel because his party, New Ideas, controls most of the legislative power in the country. So, this is just a formality in the way of Bitcoin City offer.
What do you think of El Salvador’s Bitcoin City offer and the issuance of bonds to fund it? Tell us in the comments section below.
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