El Salvador to build cryptocurrency-fueled ‘Bitcoin City’

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El Salvador President Nayib Bukele says his government will build a “Bitcoin City” by the sea at the base of the volcano

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Bukele used a gathering of bitcoin enthusiasts Saturday night to launch his latest idea, just as he used the first bitcoin conference in Miami to announce in a video message that the El Salvador cryptocurrency was legal. Will be the first country to tender

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A bond offering will take place entirely in bitcoin in 2022, said Bukele, wearing his signature backwards baseball cap. And 60 days after funding is ready, construction will begin.

The city will be built near the Conchagua volcano to take advantage of geothermal energy to power both the city and bitcoin mining – an energy-intensive solution to complex mathematical calculations day and night to verify currency transactions.

The government is already running a pilot bitcoin mining venture at another geothermal power plant next to Tekapa Volcano.

Seaside Conchagua Volcano is located in El Salvador, southeast of the Gulf of Fonseca.

The government will provide land and infrastructure and work to attract investors.

The only tax collected there would be value-added tax, half of which would be used to pay municipal bonds and the rest for municipal infrastructure and maintenance. Bukele said there would be no property, income or municipal taxes and the city would have zero carbon dioxide emissions.

The city will be constructed keeping in mind the foreign investment. Bukele said there would be residential areas, malls, restaurants and a port. The President spoke of digital education, technology and sustainable public transport.

“Invest here and make all the money you want,” Bukele told an enthusiastic crowd in English at the conclusion of the Latin American Bitcoin and Blockchain Conference in El Salvador.

Bitcoin has been legal tender with the US dollar since 7 September.

The government is backing bitcoin with a $150 million fund. To encourage Salvadorans to use it, the government offered $30 worth of credit to those using its digital wallet.

Critics have warned that the currency’s lack of transparency could attract increased criminal activity in the country and that the digital currency’s wild swings would pose risks to those holding it.

Bitcoin was originally created to operate outside financial systems controlled by the government and Bukele says it would help attract foreign investment into El Salvador and for Salvadorans living abroad to send money home to their families. will make it cheaper.

Concerns have risen this year among Salvador’s opposition and outside observers as Bukele moves to consolidate power.

Voters gave Congress control of the highly popular presidential party earlier this year. The new lawmakers immediately replaced members of the Supreme Court’s constitutional chamber and the attorney general, leaving Bukele’s party in control of other branches of government.

The US government responded by saying it would divert its aid from government agencies to civil society organizations. This month, Bukele sent a proposal to Congress that would require organizations receiving foreign funding to register as foreign agents.

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