El Salvador continues to strengthen its foothold in Bitcoin adoption, with President Nayib Bukele recently announcing the launch of Bitcoin City, which will initially be funded by $ 1 billion in Bitcoin bonds.
To achieve this goal, the El Salvadorian government has entered into a deal with leading blockchain technology providers Blockstream and Bitfinex (iFinex) to place bitcoin bonds on the Liquid Network.We have negotiated with El Salvador for many months and have put a lot of effort into designing and modeling bonds. We believe the bond offering will be attractive to a wide range of investors, primarily cryptocurrencies, as well as yield seekers, hodlers and ordinary people. The tool has the potential to accelerate hyperbitcoinization and lead to the emergence of a new financial system based on bitcoin, Blockstream said in a
The President assumes that Bitcoin City will become a fully functional city with residential areas, shopping centers. There will be no taxation in the city, with the exception of VAT, one half of which will be used to pay for bonds and the other half for the maintenance of the city.
The construction of the city is planned in the eastern region of La Union along the Gulf of Fonseca. It is planned to provide the city with electricity with the help of geothermal energy produced by volcanoes, it will also be used to mine the leading cryptocurrency.
After a five-year lock-up period, the government will start selling its bitcoins and paying additional dividends to investors, said Samson Moe, CEO of Blockstream.