Nayib Bukele announces Bitcoin City

Bukele is banking on Bitcoin

Two months ago, bitcoin began to be circulated as legal tender in El Salvador. However, its implementation has just taken a new step. President Nayib Bukele will build Bitcoin City as part of his plan to turn his country into a global financial center.

Bukele started the Bitcoin era in El Salvador this past September accompanied by both the distrust and enthusiasm of the international community. At that time, the cryptocurrency was above $ 44,000.

So far, during his tenure, 1,120 bitcoins have been acquired, which, he recently said, have registered “sufficient profits.” These funds have been used to begin the construction of the first public veterinary hospital and 20 new schools in the Central American country.

“Bitcoin has started to change the world and will change it even more as time goes on. El Salvador is experiencing a historic moment,” said the Salvadoran president before a crowd of “Bitcoineros” gathered in Mizata, a Pacific beach located 80km southwest of the country’s capital San Salvador.

Bitcoin City

In Mizata, Bukele announced the anticipated creation of Bitcoin City at the end of the party for Labitconf.  The event was a global forum that brought together enthusiasts and cryptocurrency millionaires. 

Still, without a construction deadline, it will be in the coastal city of Conchagua, where the volcano of the same name is located.   It will supply the city with the required energy through a geothermal plant. In addition, it will have an airport, residential and commercial areas, as well as a square with the Bitcoin symbol in the center.

With no levies other than the value-added tax (VAT), it will be an ecological city and will be initially financed with bonds issued in the Bitcoin ecosystem.  They will be equivalent to about 1 billion dollars.

Bukele is hoping that the development of Bitcoin City will make El Salvador the “Singapore of the Americas.”.

A break with the dollar

At the Labitconf conference, Max Keizer, a Bitcoin evangelist, broke with the dollar in public during his lecture.

“Bitcoin in El Salvador is the declaration of independence of the XXI century (…). On Twitter, I say that President Bukele is the new George Washington,” he added.

Attendees bragged about how they could shop with cryptocurrency, from purchasing their McDonald’s breakfast to traditional pupusas.   This Salvadoran treat is made of thick corn tortillas stuffed with cheese and pork.

Among the speakers that addressed attendees virtually was the American Sam Bankman-Fried. He is the CEO of FTX and one of the wealthiest people in cryptocurrencies in the world.  According to Forbes, he has amassed a fortune equivalent to 26 billion dollars.

Discovering fire

“Bitcoin is not an investment; it is truly a discovery.  It is one of the most important discoveries that humanity has made. It can be equated to the discovery of fire in prehistory,” asserted Daniel Also.  He is an Argentine developer of the Hodl Hold bitcoin trading platform and the producer of the Spanish-language BTC podcast.

More than half of the 6.7 million Salvadoran citizens have downloaded the Chivo application.  Chivo is a digital wallet that is installed on their cell phones.  Each individual was gifted the bitcoin equivalent of 30 dollars.  El Salvador’s government made these funds available to stimulate transactions and receive remittances from abroad.

In El Salvador, it is mandatory to accept purchases made with Bitcoin.  However, the end-user can opt to use dollars in the final transaction.  The US Dollar has been used as the country’s legal tender for the past two decades.

“We bitcoiners have always had problems accessing financial markets and accessing banking services. Here (in El Salvador), however, the opposite occurs. As a result, we are enthusiastically welcomed to bring our investments,” Alos commented.

The former president of the Central Reserve Bank of El Salvador, Carlos Acevedo, was on the sidelines at the conference that introduced Bitcoin. He asserted that despite being a “high-risk speculative asset,” investment in Bitcoin has become “attractive” because it is enjoying “one of its best appreciation streaks. “

According to the Salvadoran economist Luis Membreno, “a currency must be stable to allow people to make financial plans. Therefore, investors are not apt to expose their economic resources to volatility that can lead them to take significant losses.”

Membreno’s Argentine colleague Carlos Maslatón considered that Bitcoin has “a long way to go.” Nevertheless, he opined that the cryptocurrency’s value could reach nearly 400 thousand dollars in the next two years.