Lately, one has been able to read about the planned crypto city ” Bitcoin City ” which according to the plan will be founded in El Salvador. The country’s president, Nayib Bukele, has shared information about the project during ” LaBitConf “, which is a well-known crypto conference.
During the conference, Bukele was able to say, among other things, that El Salvador will be the first country in the world to issue government bonds for Bitcoin purchases. It was later revealed that these are bonds equivalent to 1 billion US dollars.
The plan is that this money will be used to build up Bitcoin City, which will of course be an expensive project.
Briefly about the Bitcoin bond
After the president of El Salvador was first able to announce that the bond will be equivalent to 1 billion US dollars, more details have been released. Among other things, it was informed that the issue of the bonds was between 15. and 20. March 2022.
Of other relevant information, it can be mentioned that the annual interest rate on the bond will be 6.5%, while the maturity is ten years. The minimum available amount that can be subscribed will be as little as 100 US dollars.
What should the bond be used for?
The Bitcoin bond is scheduled to be used on essential projects in Bitcoin City. Here we can mention, among other things, that money will go to the development of renewable energy, since the extraction of cryptocurrency is energy-intensive.
USD 500 million is expected to be used for mining Bitcoin, as well as for the development of the power plant that will extract electricity from the volcano in the area. The remaining 500 million US dollars will go to the purchase of more Bitcoin.
Is there any interest in the bond?
Yes, there are apparently already some who have expressed their interest in the Bitcoin bond. According to official sources, these parties want to sign a bond equivalent to 300 million US dollars.
To make the project extra attractive, President Bukele has decided, among other things, that Bitcoin City is completely free of property taxes, income taxes and other tax rates. The only thing that will be demanded of the inhabitants is that VAT is paid on the purchase of goods.
This will make it possible to invest and make money on Bitcoin . With renewable energy from a volcano, it will also be relatively environmentally friendly to drive the recovery of the cryptocurrency.
El Salvador is scheduled to sell Bitcoin when five years have passed, so that investors in the project can enjoy an even higher dividend.
More Bitcoin bonds in the future
According to strategy manager Mamson Mow from Blockstream – who was on stage with the president during the conference – the plan is to issue even more bonds for Bitcoin in the future.
The purpose of this is apparently to ensure that El Salvador becomes one of the leading areas of finance worldwide.
Will everything go according to plan?
Although El Salvador is apparently becoming the world’s crypto capital, there is some skepticism among the population. As many as 65% of the population want to use traditional currency. For about 20 years, the US dollar has been the currency of the country.
It will undoubtedly be exciting to see how Bukele’s plans go in the future!