El Salvador Builds Cryptocurrency-Fueled “Bitcoin City”

La Libertad, El Salvador-In a rock concert-like atmosphere, El Salvador’s President Nayib Bukele has announced that his government will build a seaside “Bitcoin City” at the foot of the volcano.

Bukele presented his latest ideas on Saturday night using a gathering of Bitcoin enthusiasts. This is the same as using a previous Bitcoin conference in Miami to announce in a video message that El Salvador will be the first country to make cryptocurrency legal tender.

According to Mr. Bukele, a bond was solicited entirely in Bitcoin in 2022, wearing a backward-looking baseball cap with his signature. And construction will begin 60 days after the funding is ready.

The city will be built near Conchagua volcano and will use geothermal energy to power both the city and Bitcoin mining. This is an energy-intensive solution to complex mathematical calculations for validating currency transactions.

The government is already running a pilot Bitcoin mining venture at another geothermal power plant next to Tekapa volcano.

The seaside Conchagua volcano is located in the southeastern part of El Salvador in the Gulf of Fonseca.

The government provides land and infrastructure and works to attract investors.

The only tax collected there is VAT, half of which is used to pay municipal bonds and the rest to the infrastructure and maintenance of local governments. Bukele said there are no property, income or local taxes and the city’s carbon dioxide emissions will be zero.

The city will be built with foreign investment in mind. According to Bukele, there are residential areas, malls, restaurants and harbors. The president talked about digital education, technology and sustainable public transport.

“Invest here and make all the money you want,” Bukele told a cheering crowd in English at the end of the Latin American Bitcoin and Blockchain conference in El Salvador.

Bitcoin has been legal tender alongside the US dollar since September 7.

The government is backing Bitcoin with $ 150 million in funding. To encourage Salvadors to use it, the government has provided $ 30 worth of credit to those using digital wallets.

Critics warn that lack of currency transparency can attract increased criminal activity to the country, and that drastic fluctuations in the value of digital currencies can pose risks to those who hold them. increase.

Bitcoin was originally created to operate outside the government-controlled financial system, and Bukele will help attract foreign investment in El Salvador and make it cheaper for Salvadorians living abroad to send money to their families. It states.

This year, Bukele’s move to strengthen power raised concerns between El Salvador’s opponents and outside observers.

Voters gave parliamentary control by a very popular presidential party earlier this year. The new lawmaker soon replaced members of the Constitutional Assembly of the Supreme Court with the Attorney General, putting Bukele’s party under the control of other branches of the government.

In response, the US government said it would transfer aid from government agencies to civil society organizations. This month, Bukele sent a proposal to Parliament requiring foreign-funded organizations to register as foreign agents.

David Barasa

Associated Press