El Salvador issues $ 1 billion in Bitcoin bonds to fund ‘Bitcoin City’ – Bitcoin News
President Nayib Bukele of El Salvador announced yesterday that he would issue a $ 1 billion “Bitcoin Bond” to build the first Bitcoin City in the world. The city would have no taxes of any kind except VAT, and it would be CO2-neutral, as most of the energy that drives it comes from geothermal sources. Bukele also announced that El Salvador would partner with Blockstream and use its liquid network to issue the aforementioned bond.
Bitcoin City announced in El Salvador
El Salvador and its President, Nayib B Watch, has taken the next step that will further integrate bitcoin into the lives of its citizens. Bukele announced yesterday at the closing event of Labitconf, a Latam-based Bitcoin conference, the construction of the first Bitcoin City in the world that would be funded with the issuance of a $ 1 billion Bitcoin Bond.
This city would be located in the eastern part of the country, with its infrastructure powered by geothermal energy. The city would also have zero taxes for its citizens. On this, Bukele listed:
Invest here and earn all the money you want. This is a fully ecological city that works and gets energy from a volcano.
The only tax levied in the city would be a value added tax that would be used to finance the construction of the city with bonds and to maintain the public infrastructure and services. Bukele provided an insight into the design of Bitcoin City, showing a circular model that will have a central place with the bitcoin symbol.
Supported by Blockstream and Bitfinex
The issuance of the bonds will be managed by Blockstream, a bitcoin service-focused company, where the tokenized bonds will be issued on top of its Liquid blockchain, a federated side chain. The $ 1 billion that the initiative aims to raise will be split into two parts. The first tranche will be used to purchase a $ 500 million allotment 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 around the world, who will have access to invest in small amounts of even $ 100 dollars, according to statement from Blockstream’s CSO Samson Mow. Dividends will be easily paid to bondholders using tools installed on top of the Liquid network.
The country will have to approve a new securities law and allow Bitfinex, the stock exchange chosen to lead this process, to organize the bond issue. It’s easy for Bukele because his party, New Ideas, controls most of the legislature in the country. So this is just a formality in the way of the Bitcoin City proposal.
What do you think of El Salvador’s Bitcoin City proposal and the bond issue to fund it? Tell us in the comments section below.
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