President Nayib Bukele of El Salvador has announced the opening of Bitcoin City, which will be funded initially by $1 billion in Bitcoin bonds. Bitcoin City will be developed with the active participation of renowned crypto organizations such as bitcoin exchange Bitfinex and Adam Back's Blockstream.
Bukele initially introduced the project at El Salvador's Bitcoin Week conference, which aimed to promote Bitcoin's mainstream adoption and increase citizen participation in the country.
In the words of Bukele:
Bitcoin City will be developed with the active participation of renowned crypto organizations such as bitcoin exchange Bitfinex and Adam Back's Blockstream. The exchange will back El Salvador's Bitcoin City proposal by developing a securities platform to house the Bitcoin bonds, according to Bitfinex CTO Paolo Ardoino.
Bitcoin Metropolis, according to the president, will be a fully functional city with residential sections, shopping malls, restaurants, a port, and "everything around Bitcoin." Furthermore, homeowners will only be subject to value-added tax (VAT), which will be used to pay the municipality's bonds, with the remainder going to public infrastructure and city maintenance, according to Bukele.
Blockstream's chief security officer, Samson Mao, confirmed the viability of obtaining the $1 billion Bitcoin bonds at the conference:
Mao also reminded the population that the $500 million in Bitcoin bonds will be locked up for five years, thereby removing the invested capital from world circulation. Furthermore, the entrepreneur indicated how a tenfold increase in comparable projects from other countries would eventually remove half of Bitcoin's 21 million market valuation from circulation.
El Salvador's government has been reinvesting unrealized gains into numerous infrastructure development initiatives since Bitcoin's mainstream adoption.
Bukele declared in early November that the state's Bitcoin Trust account excess would be utilized to build 20 new schools:
El Salvador's government invested $4 million from the income of its Bitcoin Trust in mid-October to build a new veterinary hospital in the capital, San Salvador.