El Salvador will open Bitcoin City backed by a $1 billion Bitcoin bond
El Salvador continues to lead Bitcoin (Bitcoin) With President Nayib Bukele (Nayib Bukele) announced the launch of Bitcoin City, the initial funding for the project will come from $1 billion in Bitcoin bonds.
The initiative was originally announced by Bukele at the Bitcoin Weekly Conference in El Salvador, which aims to celebrate the mainstream adoption of Bitcoin in the country and increase citizen participation.
-Presidential Palace (@PresidenciaSV) November 21, 2021
In the words of Booker:
“In #BitcoinCity, we will conduct digital and technical education. Geothermal energy and efficient and sustainable public transportation throughout the city”
The development of Bitcoin City will witness the active participation of well-known crypto companies, including cryptocurrency exchange Bitfinex and Adam Back’s Blockstream. according to Bitfinex Chief Technology Officer Bitfinex Paolo Ardoino stated that the exchange will support El Salvador’s Bitcoin City plan by launching a securities platform holding Bitcoin bonds. He added:
“[The platform] It will soon become the home of many local and foreign digital asset products, formulating new digital asset supervision for the country! El Salvador, Bitfinex and Blockstream are making history together. “
The President envisioned Bitcoin City as a fully functional city with residential areas, shopping centers, restaurants, ports, and “everything around Bitcoin.” In addition, residents only need to pay value-added tax (VAT). According to Buckler, these taxes will be used to pay for municipal bonds, and the rest will be used for public infrastructure and urban maintenance.
At the press conference, Samson Mao, Chief Security Officer of Blockstream clarify The feasibility of purchasing USD 1 billion in Bitcoin bonds:
“For Bitfinex, they have a lot of whales. I don’t think there is a problem with filling the $1 billion bond.”
Mao also informed the public that a five-year lock-in period for Bitcoin bonds worth $500 million will effectively remove investment funds from global circulation. In addition, the entrepreneur also explained how similar initiatives in other countries increased by 10 times how to finally take half of the market value of Bitcoin’s 21 million from circulation.
Soon after Bitcoin was adopted by the mainstream, the Salvadoran government reinvested unrealized gains in various infrastructure development projects.
In early November, Bukele announced that the surplus earned from the state’s Bitcoin trust account would be used to build 20 new schools:
“When this project started, we did not make so much money on FIDEBITCOIN [state BTC Trust account] As we are doing now. So we decided to establish the top 20 Bitcoin schools. “
In mid-October, the Salvadoran government invested another 4 million U.S. dollars. The profits of the Bitcoin Trust are used to build a new veterinary hospital In the capital San Salvador.