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El Salvador to Create Bitcoin City

The president, Nayib Bukele, announced at a crypto conference that the country will be building a “Bitcoin City” with no taxes.

El Salvador to Create Bitcoin City
Photo by Alejandro Alas / Unsplash

It’s been two months since El Salvador was all the buzz for Bitcoiners by announcing they were making Bitcoin legal tender, and this week they pushed the envelope again. The president, Nayib Bukele, announced at a crypto conference that the country will be building a “Bitcoin City” with “0% income tax, 0% capital gains tax, 0% property tax, 0% payroll tax, 0% municipal taxes, and 0% co2 emissions.” The only taxes that will be levied on residents will be a value add tax (VAT).

Construction on the city will begin in 2022 near Tecapa volcano, and is planned to be a circular city with a port, and a central area acknowledging that the city is built around Bitcoin.

El Salvador also announced this week that the country will be raising ~$1B of “Bitcoin Bonds” in partnership with Blockstream. The money will be going half towards buying Bitcoin and half towards building infrastructure to mine Bitcoin. The country already has tests running to use volcanic geothermal energy to run Bitcoin mining operations. These bonds will have a five year lockup period, and will pay out a dividend annually. There are also plans to sell “Volcano Bonds” that will be funded by Bitcoin mining using volcanos.