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Unlike in this illustration, Bitcoin does not exist as coins.
Photo: PAWEL KOPCZYNSKI / REUTERS
The cryptocurrency Bitcoin has been legal tender in El Salvador since September.
Now the president of the Central American country has announced: The use of Bitcoin should be promoted - by building a city, the first "Bitcoin City" worldwide.
Nayib Bukele, the 40-year-old head of state, said on Saturday: "Bitcoin City" should be the first city of its kind to be built with the income from new Bitcoin bonds.
Vulcan energy for cryptomining
The region of La Unión was chosen as the location, in the east of the country on the bay of the Gulf of Fonseca.
What distinguishes this location?
The Conchagua volcano.
Bukele said they wanted to use the geothermal energy of this volcano.
The state is currently checking whether it is possible to generate the cryptocurrency with the help of volcanic energy.
According to the president, no taxes should be levied in "Bitcoin City" except for VAT.
Half of the VAT collected will be used to finance the Bitcoin bonds issued for construction, the other half for city services such as garbage collection.
The city was planned completely ecologically, said Bukele.
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"Invest here and earn as much money as you want," said Bukele at the end of a week-long Bitcoin advertising week in the seaside resort of Mizata.
With this action El Salvador intended to attract investors.
The President was dressed all in white at this appearance and wore - as is so often the case - a baseball cap turned back.
The city will cost 300,000 Bitcoins
He estimated, the president said, that the public infrastructure will cost around 300,000 bitcoins.
A Bitcoin is currently worth a little more than 53,000 euros - accordingly, the construction of the “Bitcoin City” would cost almost 16 billion euros.
El Salvador plans to issue the first Bitcoin bonds as early as next year.
We are talking about a "volcano bond" worth a billion dollars.
Although President Bukele achieved high ratings in opinion polls, not all compatriots share his enthusiasm for Bitcoin.
The introduction of the cryptocurrency had led to protests against the government.
Since September, all traders who are technically capable of doing so have had to accept Bitcoin as a means of payment.
Taxes can also be paid in digital currency.
El Salvador has about six million inhabitants.
The US dollar has been the common currency since 2001.
This makes the country dependent on the monetary policy of the US Federal Reserve.
For the nation's economic growth it is necessary to allow a digital currency, the value of which depends solely on market economy criteria, it said in the Bitcoin legal text.
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Bitcoin is the most popular digital currency.
It is not controlled by a central bank, but created by a decentralized, energy-intensive computer process.
The crypto currency is considered an object of speculation and is subject to violent price fluctuations.
Many criticize the fact that there is hardly any form of regulation for the crypto currency.
In addition, the energy consumption of so-called mining - the creation of new coins - is immensely high.
vki / Reuters
