El Salvador continues to lead the Bitcoin (BTC) adoption campaign as President Nayib Bukele announces the launch of Bitcoin City, which will initially be funded by billion dollar Bitcoin bonds.
The initiative was first announced by Bukele during El Salvador’s Bitcoin Week conference, which aimed to celebrate the widespread adoption of Bitcoin in the country and increase citizen participation.
– Presidential House (@PresidenciaSV) November 21, 2021
In Bukele’s words:
“In #BitcoinCity we will have digital and technological education. Geothermal energy for the whole city and efficient and sustainable public transport ”
The development of Bitcoin City will see the proactive involvement of major crypto companies, including the cryptocurrency exchange Bitfinex and Adam Back’s Blockstream. According to At Bitfinex CTO Bitfinex Paolo Ardoino, the exchange will support El Salvador’s Bitcoin City initiative by launching a securities platform to hold Bitcoin bonds. He added:
“[The platform] will soon be home to many local and foreign digital asset offerings developing new digital asset regulations for the country! El Salvador, Bitfinex and Blockstream make history together.
The president envisions Bitcoin City becoming a fully functional city with residential areas, shopping malls, restaurants, a port, “all around Bitcoin”. Additionally, residents will only be subject to value added tax (VAT), which Bukele says will be used to pay for the municipality’s obligations, and the rest for public infrastructure and city maintenance. .
At the conference, Blockstream’s security manager, Samson Mao clarified the feasibility of sourcing the billion dollar Bitcoin bonds:
“With Bitfinex, they have a lot of whales. I don’t see a problem with fulfilling a billion dollar obligation.
Mao also informed citizens that the $ 500 million Bitcoin Bonds will be subject to a five-year blocking period, effectively removing the invested capital from global circulation. Additionally, the entrepreneur explained how a 10-fold increase in similar initiatives from other countries will end up taking half of Bitcoin’s $ 21 million in market capitalization out of circulation.
Related: El Salvador to Build 20 “Bitcoin Schools” with Bitcoin Trust Surpluses
Shortly after the widespread adoption of Bitcoin, the Salvadoran government reinvested unrealized gains in various infrastructure development projects.
In early November, Bukele announced that the surplus generated by the state’s Bitcoin Trust account would be used to build 20 new schools:
“When this project was launched, we had not made so much money in FIDEBITCOIN [state BTC Trust account] as we have done now. So we decided to create the first 20 Bitcoin schools.
In mid-October, the government of El Salvador reinvested $ 4 million of profits from their Bitcoin Trust to build a new veterinary hospital in the capital, San Salvador.