El Salvador takes one more step in its commitment to Bitcoin. President Nayib Bukele has announced the intention to create the world’s first ‘Bitcoin City’. A city that would be located in the coastal city of Conchagua and would be initially financed by funds based on Bitcoin.
This project leaves many doubts about its operation, from what the city will be like to what benefits it will have for being a “Bitcoin city”. Here we explain what we know about this new initiative in El Salvador, a new example of how the Central American country is becoming a testing laboratory for the crypto universe.
Shaped like a coin and next to a volcano
Bukele’s plan is reminiscent of Alexander the Great’s plans with his circular cities. This new “Bitcoin City” would have coin shape and it is intended to build restaurants, shopping malls, residential areas, a central square shaped like the Bitcoin symbol and even a airport.
The president of El Salvador is not cut off with his plans and the words used to describe the project are as grandiose as they are striking for a person of his position: “if we want bitcoin to spread throughout the world, we should build some Alexandrías,” he explained. .
El Salvador will be the first country in the world to have a #BitcoinCity!
It will be between the city of La Unión and Conchagua. People may live in La Unión but work in the #BitcoinCity. Soon they will start to see all the benefits, when development and investment comes. pic.twitter.com/21bx7Yc5aJ
– Presidential House 🇸🇻 (@PresidenciaSV) November 21, 2021
The location of the city in Conchagua is not accidental, since a volcano is located there. It is precisely with this volcano with which it is intended to obtain energy for mining bitcoins.
Last October, El Salvador began mining bitcoins using the energy of volcanoes. It is not something casual, since for years the country produces a quarter of its electricity with geothermal energy.
Bukele has described what he wants this city to be like, but there is no official calendar yet on when they intend to have it ready. As described CNBC, its construction start would be in 2022.
No property taxes
Days before presenting this project, El Salvador ad what are you planning issue $ 1 billion in 10-year tokenized bonds on Liquid Network. Half of the proceeds will be used to buy BTC and give dividends, while the other $ 500 million will be invested in energy infrastructure and bitcoin mining. It is from this second game that the initial funds for the construction of this city would arise, which can be understood almost as a long-term expansion of its mining factories.
Among the tax benefits that the future city promises would be the elimination of practically all taxes, except VAT. Some of those that would be at 0% are taxes on housing, income, capital, CO2 emissions and municipal taxes.
“The only taxes they will have in ‘Bitcoin City’ is VAT, half will be used to pay for municipal bonds and the rest for public infrastructure and the maintenance of the city, “explained the president of El Salvador.
Image | Presidential House Salvador