El Salvador plans the world's first "bitcoin city" 1:00
(CNN Spanish) ––
The president of El Salvador, Nayib Bukele, unveiled on Monday the models of two of his bets: Bitcoin City and the new Pacific airport, with which he seeks to generate development in the east of the country.
The construction of Bitcoin City was announced by Bukele last November during the closure of the bitcoin event “Feel The Bit 2021”.
The city, according to the president, will be built near the Conchagua volcano, in the department of La Unión.
Bitcoin plunges more than 50% below its all-time high as cryptocurrencies tumble again
The idea is, according to the authorities, to take advantage of the volcano's energy to mine bitcoins and feed the city, which will have residential and commercial areas.
The place will also be equipped with services, entertainment areas, restaurants, airport, port and train station.
The construction of the city, according to the government of El Salvador, would be financed with the issuance of bonds in bitcoin worth US $ 1,000 million.
Although the broadcast was scheduled for mid-March last, the government suspended it.
"We are waiting for the right moment to issue the bonds," said Alejandro Zelaya, Minister of Finance of El Salvador, during an interview with a local channel on May 2.
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According to the plan of the government of El Salvador, the issuance of more bonds would serve to buy more bitcoins.
However, this Monday Bukele published on his Twitter account that he had bought 500 more coins, taking advantage of the fact that the price was around US $30,000.
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The Government of El Salvador prepares the issuance of bonds to finance Bitcoin City
Precisely, the model of Bitcoin City was unveiled on the same day that bitcoin plummeted more than 50% below its all-time high.
At a price of just under $31,000, the cryptocurrency posted less than half of its all-time high of nearly $69,000 from late last year on Monday, and its lowest point since July 2021.
IMF position
El Salvador adopted bitcoin as legal tender since September 7, 2021. The International Monetary Fund has told El Salvador that the use of bitcoin as legal tender involves "great risks" due to its high volatility.
Therefore, he has suggested "limiting the scope of the law" and "urging" to strengthen the regulation and supervision of the payment system.
The government of El Salvador stated that it did not agree with this assessment.
El Salvador becomes the first country to adopt bitcoin as its national currency
In a November 2021 report, the multilateral organization warned the government about the possible growth of public debt exceeding 95% of the Gross Domestic Product (GDP) by 2026 due to the "absence of decisive economic policy measures to correct fiscal imbalances and alleviate these constraints to growth.
El SalvadorNayib Bukele
