As El Salvador spearheads cryptocurrency acceptance across the globe, with the president Nayib Bukele announcing the launch of the Bitcoin City which will be funded by $1 billion worth of Bitcoin bond, Captivating interest from noteworthy crypto firms such as Bitfinex and Blockstream has consistently occurred within this period.
Bukele publicized the crypto initiative (Bitcoin City) at El Salvador’s Bitcoin Week conference, which sought to celebrate Bitcoin’s mainstream adoption in the country and increase citizen participation.
His words, “In Bitcoin City we will have digital and technological education. Geothermal energy for the entire city and efficient and sustainable public transport”
The evolution of Bitcoin City will see the enterprising participation of prominent crypto companies, including cryptocurrency exchange Bitfinex and Adam Back’s Blockstream.
According to Bitfinex CTO Bitfinex Paolo Ardoino, the exchange will support El Salvador’s Bitcoin City initiative by launching a securities platform to hold the Bitcoin bonds.
He further stated “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.”
The president envisions Bitcoin City to become a fully functional city with residential areas, shopping centers, restaurants, a port, “everything around Bitcoin.” Moreover, the residents be subject to only value-added tax (VAT), which according to Bukele will be used to pay the municipality’s bonds, and the rest for public infrastructure and city maintenance.
At the conference, Block stream’s chief security officer Samson Mao clarified the feasibility of sourcing the $1 billion Bitcoin bonds: “With Bitfinex, they have a lot of whales. I don’t see a problem filling up a $1 billion bond.”
Samson Mao also stated that the citizens that the $500 million worth of Bitcoin bonds will be subject to a five-year lock-up period, effectively taking away the invested capital out of the global circulation. Concurrently, the CSO of Block stream explained how a 10 fold increase in similar initiatives from other countries will eventually take away half of Bitcoin’s 21 million market capitalization out of circulation.
After Bitcoin’s primary adoption, the El Salvador government has been reinvesting unrealized gains onto various infrastructure development projects.