El Salvador Announces Bitcoin City and Plans to Issue $1 Billion Bitcoin Bonds

El Salvador Announces Bitcoin City and Plans to Issue $1 Billion Bitcoin Bonds

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Answer El Salvador Announces Bitcoin City and Plans to Issue $1 Billion Bitcoin Bonds

The Latin American country El Salvador has announced plans to launch the world’s first bitcoin city.

The head of state, “Nayib Bukil,” announced the launch event yesterday, Saturday, November 20.

According to the announcement, Bitcoin City will be initially funded through Bitcoin bonds.

Besides, the planned city in the east of the country will get its power supply from volcanoes and will not levy any taxes except for Value Added Tax (VAT).

Bitcoin fanatic Max Kaiser deserves a special mention on this occasion because he first proposed the idea in June 2021.

At the time, he said that floating El Salvador’s “Bitcoin Bond” could help the country retire from IMF loans.

Bitcoin bonds and volcanoes:

According to available details, El Salvador plans to issue $1 billion in 10-year dollar token bonds.

President Bukele said:

We will start financing in 2022, and the bonds will be available in 2022.

However, Bukele took advantage of two major players, Blockstream and Bitfinex, to issue these bonds.

Along with Bukele, Blockstream’s chief strategy officer, Simson Maw, said the bond will pay out 6.5% via the Liquid network.

Interestingly, half of the “bonds” will be converted into Bitcoin, and the remaining half will be used for infrastructure and geothermal-backed Bitcoin mining facility development.

Mao further explained that after a five-year shutdown, the government would start selling bitcoins and paying additional dividends to investors.

According to the Blockstream model, at the end of 10 years, the expected annual return could be close to 150% taking into account the expected Bitcoin appreciation.

Read:The CEO of “Binance” reveals the cryptocurrencies he owns … Get to know them

Mao also noted that this plan would help El Salvador become Singapore’s Latin America.

The first countries to do so will have a huge advantage.

Mao added:

This is the beginning of the Bitcoin-based nation-state.

The infrastructure of the Bitcoin city will be built near the “Conchagua” volcano, which will help provide energy for mining.

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