El Salvador continues to lead Bitcoin (BTC) adoption as President Nayib Bukele announces the launch of Bitcoin City, initially funded by $ 1 billion in Bitcoin bonds.
The initiative was first announced by Bukele at the Bitcoin Week conference in El Salvador, which aimed to celebrate the adoption of Bitcoin in the country and increase citizen participation.
– Casa Presidencial (@PresidenciaSV) November 21, 2021
In Bukele’s words:
“In #BitcoinCity we will have digital and technological education. Geothermal energy for the entire city and efficient and sustainable public transport “
Bitcoin City’s development will see the proactive involvement of prominent crypto companies, including the Bitfinex cryptocurrency exchange and Adam Backs Blockstream. To to Bitfinex CTO Bitfinex Paolo Ardoino, the exchange will support the Bitcoin City initiative of El Salvador by introducing a securities platform to hold the Bitcoin bonds. He added:
“[The platform] will soon host many local and overseas digital assets offerings developing a new digital asset regulation for the country! El Salvador, Bitfinex and Blockstream are writing history together. “
The president envisions Bitcoin City becoming a fully functional city with residential areas, shopping malls, restaurants, a port and “everything related to Bitcoin”. In addition, residents are only subject to VAT, which, according to Bukele, is used to pay for the municipality’s loans and the rest for public infrastructure and city upkeep.
Speaking at the conference was Blockstream’s Chief Security Officer, Samson Mao clarified the feasibility of obtaining the $ 1 billion worth of Bitcoin bonds:
“With Bitfinex, they have a lot of whales. I don’t see any problem replenishing a $ 1 billion bond. “
Mao also informed citizens that the $ 500 million bitcoin bonds will be subject to a five-year lockup period, effectively taking the invested capital out of circulation around the world. In addition, the entrepreneur explained how a tenfold increase in similar initiatives from other countries will eventually wipe out half of Bitcoin’s 21 million market capitalization.
Related: El Salvador is building 20 “Bitcoin Schools” with surplus from Bitcoin Trust
Shortly after the mainstream adoption of Bitcoin, the El Salvador government reinvested unrealized gains in various infrastructure development projects.
In early November, Bukele announced that the surplus from the state’s Bitcoin Trust account will be used to build 20 new schools:
“When this project started, we hadn’t made that much money with FIDEBITCOIN [state BTC Trust account] like we did now. So we decided to do the first 20 Bitcoin schools. “
In mid-October, the El Salvador government reinvested $ 4 million from the profits of its Bitcoin trust to build a new animal hospital in the capital, San Salvador.