The government of El Salvador is looking to carry on with its pro-crypto developments and has unveiled an ambitious new project called Bitcoin City, which is supposed to be a massive infrastructure project centered around the crypto space. Several top crypto companies including Bitfinex have already announced their intention to be part of this mega initiative.
El Salvador’s Bitcoin City
El Salvador is now looking to take things up a notch by embarking on this massive development project, something like which hasn’t really been attempted in other parts of the world. With this move, the Central American country is looking to become a hotbed for crypto development and innovation around the world. The country is already taking the lead in crypto regulation. It became the first geo-political entity to declare Bitcoin as a legal tender in the country, even though several international monetary organizations warned it not to do so. The current government has also engaged in several state-sponsored moves to uplift the crypto sector in the country and has directed merchants across the country to start accepting the digital currency as payment. It has also engaged in a lot of crypto education programs across the country to help citizens adapt with this seismic change and take benefits from it.
The new mega Bitcoin City project was announced by the President of the Country Nayib Bukele. Like many crypto projects, this is also his brainchild and he wishes to make good use of it. Bukele made big claims around this move:
“In #BitcoinCity we will have digital and technological education. Geothermal energy for the entire city and efficient and sustainable public transport…..,[The platform] will soon be home to many local and foreign digital assets offerings developing new digital asset regulation for the country! El Salvador, Bitfinex and Blockstream are making history together.”
About the $1 Billion in Bitcoin Bonds
The main premise of the new city is that everything will be built around Bitcoin itself. The residents will be subjected only to a Valued Added Tax (VAT) according to Bukele. The government wants to raise $1 billion in Bitcoin bonds to start development on the city. The partnership with Bitfinex is expected to play a major role in this regard. There is also talk of the Bitcoin bonds being locked in place for 5 years, thus keeping them away from the global supply, thus cutting off further supply of the digital currency.
However, this type of project is easier said than done. While the crypto sector is growing exponentially, there is not a lot of trust around the El Salvadoran government and whether or not it can deliver on such promises. There is considerable opposition to its pro-crypto moves within the country as well because of various reasons as well. It is also not advisable to release Bitcoin bonds because the cryptocurrency can be quite volatile overall and it may be several times higher in value by the end of these five years.
So, boasting about this new project is one thing and actual work on ground is another.
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