El Salvador to Soon Launch Bitcoin Backed City Using $1 Billion BTCs

Shumaila  |  Nov 21, 2021

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.

Prez Nayib Bukele of El Salvador to Inaugurate Bitcoin City

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:

“In #BitcoinCity we will have digital and technological education. Geothermal energy for the entire city and efficient and sustainable public transport.”

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.

He continued, "[The platform] will soon be home to many local and foreign digital assets offerings developing new digital asset regulation for the country! El Salvador, Bitfinex, and Blockstream are making history together.”

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:

“With Bitfinex, they have a lot of whales. I don’t see a problem filling up a $1 billion bond.”

BTC Metropolis Will be Fully Functional

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:

“When this project was started, we had not made as much money in FIDEBITCOIN [state BTC Trust account] as we have made now. So we have decided to make the first 20 Bitcoin 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.

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