El Salvador plans to build the world’s first Bitcoin City, President Nayib Bukele said yesterday. He explained that the construction of the city will take place at the expense of bitcoin bonds. Bitcoin City is planned to be erected in the eastern province of La Union, near the border with Honduras. The president said that the nearby geothermal springs and a volcano will provide energy to the city, and local businesses will be exempt from all taxes except VAT.
“Invest there and earn as much as you can,” President Bukele said. “It will be a completely eco-friendly city that will be powered by a volcano.” It is planned that half of the proceeds from the incoming VAT will be directed to finance the construction of the city, and the other half – to pay for the work of utilities. According to the President of El Salvador, the construction of the infrastructure of “Bitcoin City” will cost about 300 thousand bitcoins ($ 17.8 billion).
In June, El Salvador became the first country in the world to recognize Bitcoin as its official currency. Since September 7, Bitcoin has been circulating in the country on a par with the US dollar, which since 2004 has been the only currency of this Central American state. However, the financial infrastructure and ordinary citizens were not ready for the innovation. In September, the Salvadorans, dissatisfied with the legalization of bitcoin, held protests.