President Nayib Bukuele stated that El Salvador intends to create the first “Bitcoin City” in the world, powered by a volcano and funded by cryptocurrency bonds.
Bitcoin City “is going to include everything: residential areas and commercial areas, museums, services… airport, port and rail,” Bukele stated at the Latin American Bitcoin and Blockchain Conference.
El Salvador, which has been using the US dollar for over two decades, became the first country to legalize Bitcoin as a legal tender.
Bukele stated that the Conchagua volcano would power the entire city as well as the mining.
Bitcoin mining refers to the process of creating new bitcoin using computers that solve complex mathematical puzzles. This process requires a lot of energy.
Some of the energy in El Salvador comes from a geothermal facility that is fed by the Tecapa volcano.
Bukele stated that the city would initially be powered from the Tecapa plant, before his government built a new Conchagua geothermal plant.
“Zero Co2 emissions. “This is a fully eco-friendly city,” Bukele said to the crowd.
According to Samson Mow (chief strategy officer at Blockstream), a provider of blockchain technology, El Salvador will issue $1 Billion “bitcoin bonds” in 2022 to finance the project.
Mow, who was on stage with Bukele said that half of the “volcano bonds”, would be invested in Bitcoin and half in infrastructure.
Mow stated that El Salvador would be the financial centre of the world.
Bukele stated that Bitcoin City will not charge VAT (value added tax).
“We will have no income tax. Zero percent forever. Zero capital gains tax… zero property tax, zero payroll tax,” he said.