El Salvador President Nayib Bukele announced that his government will build the first Bitcoin city in the city of La Libertad, near the Conchagua volcano, in the southeast of the nation.
The announcement was made in the midst of LaBitconf, the first Latin American cryptocurrency conference, which was held in El Salvador. Months ago, the Central American nation became the first country in the world to decree Bitcoin as legal tender.
In 2022, the Government of El Salvador will launch an offer of bonds that can be purchased in Bitcoin to finance the construction of the aforementioned city. 60 days after the financing is completed, the crypto-city construction will begin.
The only tax that will be levied on the Bitcoin city is value-added tax and half of the proceeds will be used to pay for the bonds that financed the construction of the city. The other half will be used to finance the infrastructure of the urban complex.
Bukele assured that there would be no property, income or municipal taxes.
The city will be built near the Conchagua volcano to take advantage of the geothermal energy of the colossus, and thus boost Bitcoin mining, which will be powered by a power plant to be built by the Salvadoran state.
His administration already has a Bitcoin mining project powered by geothermal energy near the Tecapa volcano in the southwest of the country.
The city will be built with a view to attracting foreign investment to El Salvador. According to Bukele, there will be residential areas, shopping malls, restaurants and a port. “Invest here and make all the money you want”, said the president to the euphoric audience.
The government of El Salvador has a fund of more than $150 million in Bitcoin. To encourage the use of the cryptocurrency, the executive branch has offered citizens a $30 credit for those who download “Chivo Wallet,” El Salvador’s crypto wallet to deposit and facilitate Bitcoin transactions.
Due to its low fees, “Chivo Wallet” could capture the audience that currently uses the services of companies such as Western Union to send money to their families in El Salvador.
Up to a quarter of the Central American country’s GDP depends on remittances from the United States.