El Salvador, which apparently is the only country where bitcoin is a legal tender, is going to build an entire city based on the largest cryptocurrency – bitcoin.
According to TIME, the country’s leader, President Nayib Bukele announced yesterday (Nov 21), that his government will build an oceanside “Bitcoin City” at the base of a volcano, located along the Gulf of Fonseca.
The plan is to build a power plant by the volcano to provide energy for both the city and bitcoin mining.
In a rock concert-like atmosphere full of bitcoin enthusiasts, Bukele said that it 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.
It will have no income, property, capital gains or payroll taxes. Meanwhile, investors will also be awarded permanent residence and be fast-tracked to citizenship.
A bond offering would happen in 2022 entirely in bitcoin and 60 days after financing is ready, construction would begin, Bukele said.
Samson Mow, chief strategy officer of Blockstream who also spoke at the event said that El Salvador plans to issue US$1 billion in tokenised US-dollar denominated 10-year bonds to pay 6.5 per cent via the Liquid Network.
Of that amount, $500 million will be used to help construct needed energy and bitcoin mining infrastructure and $500 million to buy even more bitcoin.
The plans will make El Salvador “the financial centre of the world” and “the Singapore of Latin America”, Mow said, adding he expects other countries to follow suit.
“The first countries that do this will have a massive advantage. This is the beginning of nation-state bitcoin FOMO,” Mow said, referring to the term “fear of missing out”.