El Salvador government put more weight behind Bitcoin, here also BBC News report President Nayib Bukele has unveiled the plan to build the “Bitcoin City” near Gulf of Fonseca between La Union and Conchagua.
With their own geothermal power plant, the metropolis will help crypto mining and there will be no capital gains, income, taxes, but only just value-added tax.
Nayib Bukele didn’t provide an exact date for the creation of the city, but he unveiled a $1 billion US Bitcoin bond, where half of them used to build energy and mining infrastructure.
The strategy chief for bond developer Blockstream, Samson Mow, said El Salvador would start selling crypto holdings after five years and pay an extra dividend to bondholders.
¡El Salvador será el primer país del mundo en tener una #BitcoinCity!— Casa Presidencial 🇸🇻 (@PresidenciaSV) November 21, 2021
Estará entre la ciudad de La Unión y Conchagua. Las personas podrán vivir en La Unión pero trabajar en la #BitcoinCity. Pronto empezarán a ver todos los beneficios, cuando el desarrollo y la inversión llegue. pic.twitter.com/21bx7Yc5aJ
The move is a huge gamble for a company with a gross domestic product of just over $24.6 billion in 2020. Bukele’s administration is counting on Bitcoin to spur economic growth, independence, and investment, but this also assumes the monetary format remains on an overall upward trajectory.
It’s also unclear if would-be residents and investors will flock to a Bitcoin-oriented city, even with tax incentives. This is new territory for cryptocurrency, and it’s not certain if there’s enough support to help the project thrive.