Bitcoin City will be developed with the active participation of renowned crypto firms such as bitcoin exchange Bitfinex and Adam Back's Blockstream.
President Nayib Bukele of El Salvador has declared the launch of Bitcoin City, which will be funded initially by $1 billion in Bitcoin bonds.
Bukele initially introduced the project during El Salvador's Bitcoin Week conference, which intended to promote Bitcoin's mainstream adoption and enhance citizen engagement in the country.
Bitcoin City will be developed with the active participation of renowned crypto organisations such as bitcoin exchange Bitfinex and Adam Back's Blockstream.
The exchange will assist El Salvador's Bitcoin City initiative by developing a securities platform to handle the Bitcoin bonds, according to Bitfinex CTO Paolo Ardoino. He concluded,“[The platform] will soon be home to many local and foreign digital assets offerings developing new digital asset regulation for the country! El Salvador, Bitfinex and Blockstream are making history together.”
Bitcoin City, according to the president, will be a completely functional city with residential regions, shopping centres, restaurants, a port, and "everything around Bitcoin." Furthermore, residents will only be liable to value-added tax (VAT), which will be used to pay the municipality's bonds, with the rest allocated to public infrastructure and city maintenance, according to Bukele.
Blockstream's chief security officer, Samson Mao, discussed the viability of acquiring the $1 billion Bitcoin bonds during the conference: “With Bitfinex, they have a lot of whales. I don’t see a problem filling up a $1 billion bond.”
Mao also told the citizens that the $500 million in Bitcoin bonds will be locked up for five years, thereby withdrawing the invested capital from global circulation. Moreover, the entrepreneur indicated how a tenfold growth in comparable ventures from other countries would ultimately remove half of Bitcoin's 21 million market capitalization from circulation.
El Salvador's government has been reinvesting latent profits into several infrastructure development initiatives since Bitcoin's mainstream adoption.
Bukele announced in early November that the state's Bitcoin Trust account excess will be utilised to build 20 new schools:“When this project was started, we had not made as much money in FIDEBITCOIN [state BTC Trust account] as we have made now. So we have decided to make the first 20 Bitcoin Schools.”
El Salvador's government contributed $4 million from the profits of its Bitcoin Trust towards a new veterinary hospital in the capital, San Salvador, in mid-October.
