Just when we though El Salvador was chipping it all in Bitcoin, they had to come up with Bitcoin City. As the only country who accepts Bitcoin as legal tender, Nayib Bukele has announced plans to build a city based on BTC. The news had a positive effect on the market following an almost 10% price correction.
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But Why Bitcoin city?
El Salvador is by any standard a poor country. With a $4,131 GDP per capita, the country is not doing well by any means. However, building a city based on Bitcoin will turn everything upside down according to Bukele. They even have Bitcoin week in November in which the president announced his utopian visions.
Bitcoin City will be located near a volcano on the Gulf of Fonseca. A beautiful coastal area with a volcanic power plant to provide energy for both the city and the mining projects. Surprising to no one, the city will be round as the shape of a coin.
And yes, Nayib Bukele described the city as a metropolis with mesmerizing residential and commercial areas. It will have airports, rail sections with a plaza in between that will portray a huge Bitcoin symbol. As for the best part, well, there shall be no tax! No income tax, no property, capital gains or payroll tax will be given in Bitcoin city.
Bitcoin City How?
The country or more accurately Bukele plans to issue a $1 billion US “Bitcoin bond”. Blockstream has developed the bond as a tokenized financial instrument on the Liquid Network. $500 million is dedicated to building the power and mining infrastructure. The other $500 million will be directly invested in Bitcoin.
The country is granting permission to Bitfinex securities to oversee the issuance. The US dollar denominated bond is for 10 years with an initial pay of 6.5%. According to reports, El Salvador will have to endure a lock-up period of five years. Following which, they can start liquidating mined cryptocurrencies and pay added dividend to bond holders.
And yes, Blockstream Chief Strategy Officer told the press that El Salvador will become “the Singapore of Latin America”
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