El Salvador is still leading the Bitcoin adoption drive. President Nayib Bukele announced the launch of Bitcoin City. It will be funded initially with $1 billion Bitcoin bonds.
Bukele announced the initiative at El Salvador’s Bitcoin Week conference. The event aimed to celebrate Bitcoin’s mainstream adoption and encourage citizen participation.
“Pense que teniamos que dar un anuncio grande en esta #BitcoinWeek. Asi que hoy quiero anunciar que vamos a construir la primera #BitcoinCity”, Presidente @nayibukele. pic.twitter.com/7yHQLyIjBx
— Casa Presidencial (@PresidenciaSV) November 21, 2021
Bukele’s words are:
“In #BitcoinCity, we will have digital education and technology training. The entire city will have geothermal energy and sustainable, efficient public transport.
Proactive involvement by prominent crypto companies, including Bitfinex and Adam Back’s Blockstream, will be key to the development of Bitcoin City. Bitfinex CTO Bitfinex Paolo Ardoino stated that the exchange will help El Salvador launch the Bitcoin City initiative through the creation of a securities platform to manage the Bitcoin bonds. He said:
“[The platform] will soon house many foreign and local digital assets offerings, developing new digital asset regulations for the country!” El Salvador, Bitfinex, and Blockstream are creating history together.
President Bitcoin City envisions a city that is fully functional with shopping centers, residential areas, restaurants, and a port. According to Bukele, this tax will only be applied to the municipality’s bonds and the remainder for maintenance and public infrastructure.
Blockstream’s Chief Security Officer Samson Mao explained the feasibility of sourcing $1 billion worth Bitcoin bonds at the conference.
“Bitfinex has a lot whales. Filling up a $1 million bond is no problem to me.”
Mao informed citizens that Bitcoin bonds worth $500 million will be subject to five-year lockup, effectively removing the invested capital from the global circulation. The entrepreneur also explained that a 10fold increase in similar initiatives by other countries would eventually wipe out half of Bitcoin’s 21,000,000 market capitalization.
Related: El Salvador will build 20 “Bitcoin Schools” with the surplus of Bitcoin Trust
The El Salvador government reinvests unrealized profits into various infrastructure projects shortly after Bitcoin became mainstream.
Bukele, in November, announced that the state’s Bitcoin Trust account surplus would be used to construct 20 new schools.
“When we started this project, we didn’t have as much money in FIDEBITCOIN [state BTC Trust] accounts as we do now. We have made the decision to create the first 20 Bitcoin Schools.
The government of El Salvador reinvested $4 million from their Bitcoin Trust profits in October to build a new veterinary hospital.