“If you want Bitcoin to spread over the world, we should build some Alexandrias”
El Salvador has become an important player in the crypto world thanks to the boldness of its President Nayib Bukele.
Now is time to capitalize on this.
Speaking at Bitcoin Week’s closure, he announced the country’s plans to build the world’s first BitcoinCity, funded by bitcoin-backed bonds.
Bitcoin city will not levy any taxes except the VAT, and will be fully ecological, using volcano-powered energy. Half of the VAT levied would be used to fund the bonds issued to build the city, and the other half would pay for infrastructure and services.
The first issue – 10-year Bitcoin-backed “volcano bonds” worth $1Bn with an interest rate of 6.5% – are to be issued in 2022. The bonds will be issued on the Liquid Network (Bitcoin sidechain), and half of the sum will be used to buy bitcoins, and the other half – to fund Bitcoin City.
After a 5-year lock-up, El Salvador would start selling some to give investors “additional coupon”.
El Salvador has already funded several infrastructure projects, like a vet hospital and 20 schools, with the gains from its Bitcoin Fund. Now it is taking bitcoin-backed funding to the next level, targeting investors who not only believe in Bitcoin, but also in El Salvador. The Volcano bonds would be indeed a good measure of the market’s appreciation of the country’s potential.
Can Nayib Bukele make it “the financial center of the world”?