Earlier this year in June, El Salvador had passed a law recognizing bitcoin as a legal tender in the country. While that raised concerns across different banking organizations and cryptocurrency detractors, the Central American country has announced its plans to build a ‘Bitcoin City’ at the base of a volcano, funded initially by bitcoin-backed bonds. The announcement was made by President Nayib Bukele on Saturday at a bitcoin conference. The Bitcoin City will be built near the Conchagua volcano that sits in southeastern El Salvador on the Gulf of Fonseca. According to the plans, the future city will take advantage of geothermal energy to power both the city and Bitcoin mining. “Invest here and make all the money you want,” Bukele said. “This is a fully ecological city that works and is energized by a volcano.”
President Bukele did not mention when the construction of the city is slated to begin, nor did he give a deadline for its completion. However, he estimated that much of the public infrastructure would cost around 300,000 Bitcoins. “Residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, rail – everything devoted to Bitcoin,” the 40-year-old said. The country plans to raise around $1 billion via a “Bitcoin Bond” in partnership with Blockstream, a digital assets infrastructure company. The funds raised will be used in buying bitcoins and also to take care of energy and bitcoin mining infrastructure.
Bukele plans on turning El Salvador into the next big tax haven and trading legally in non-traceable cryptocurrency will be a big selling point. Bitcoin has been legal currency since September along with the US dollar, and the president hopes to boost the country’s economy with this move. However, the country’s citizens have been divided on making Bitcoin a legal tender, with some worried about the rise in criminal activities. It will be interesting to see how the story develops.