President Nayib Bukele, of El Salvador, announced yesterday he would issue a $1 billion “Bitcoin Bond” to build the first Bitcoin City in the world. It will have no taxes, except VAT, and be carbon neutral with the majority of its energy coming from geothermal sources. Bukele announced that El Salvador would join Blockstream to use its liquid network for the issuance of the aforementioned bond.

Bitcoin City Announced at El Salvador

El Salvador and its president, Nayib Bukele, have taken the next step that will integrate bitcoin further into the lives of its citizens. Yesterday, Bukele, a Latam-based Bitcoin conference organizer, announced the creation of the first Bitcoin City worldwide, which would be funded by the issuance a $1 Billion Bitcoin Bond.

This city would be in the east of the country and its infrastructure would be powered by geothermal power. It would have no taxes for its residents. On this, Bukele stated:

Invest here to make as much money as you like. It is an ecologically sound city, which is powered by a volcano.

The only tax collected by the city would be the value-added tax. This tax will be used for the financing of the construction of the city using bonds and maintenance of public infrastructure. Bukele showed a model of Bitcoin City that features a central plaza displaying the bitcoin symbol.

Backed By Blockstream and Bitfinex

Blockstream, a company that specializes in bitcoin services, will manage the issuance of the bonds. The tokenized bonds will be issued on top Blockstream’s Liquid blockchain. This sidechain is federated and the Liquid blockchain will serve as the central hub for the tokenized bonds. The $1 billion the initiative hopes to raise will be split into two parts. The first part will be used to purchase a $500 million allocation of bitcoin, and the second $500 million will be used to build bitcoin-specific mining and power infrastructure.

The tokenized bond will be available to a number of users in the world, that will have access to invest in small amounts of even $100 dollars, according to statements from Blockstream’s CSO Samson Mow. Bondholders will receive dividends easily using tools that are part of the Liquid Network.

The country must approve a new Securities Law and permit Bitfinex to arrange the bond issuance. Bukele’s party, New Ideas holds most of the legislative power. This is a mere formality that will not affect the Bitcoin City proposal.

What do you think about El Salvador’s Bitcoin City proposal and the bond issuance to fund it? Please leave your comments below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. This article is not intended to be a solicitation or offer to buy or sell any products or services. Bitcoin.com does not provide investment, tax, legal, or accounting advice. The author and the company are not responsible for any loss or damage resulting from or in connection to the content, goods, or services discussed in this article.

Read More