El Salvador plans to build the world’s first “Bitcoin City”, funded initially by bitcoin-backed bonds, President Nayib Bukele said on Saturday, doubling down on his bet to harness the crypto currency to fuel investment in the Central American country.
Likening his plan to cities founded by Alexander the Great, Bukele said The city will have residential and commercial areas, services, entertainment, restaurants and an airport and will be built near Conchagua volcano in south eastern El Salvador.
“If you want bitcoin to spread over the world, we should build some Alexandrias,” said Bukele, a tech savvy 40-year-old who in September proclaimed himself “dictator” of El Salvador on Twitter in an apparent joke.
Construction will begin in 2022 and the city will have no taxes except from value added tax (VAT).
In June, El Salvador passed a law making it the first country in the world to accept bitcoin as legal tender. But not all of its population is on board with the move.
In September, thousands of people took the streets to protest against the law, fearing the introduction of the cryptocurrency could lead to instability in the central American nation.
The country has also launched a bitcoin wallet to allow citizens to use the cryptocurrency.
El Salvador planned to issue the initial bonds in 2022, Bukele said, suggesting it would be in 60 days time.
Samson Mow, chief strategy officer at Blockstream, said that there is a five-year lock-up on the bond which is designed to take $500 million of bitcoin off the market for that period of time.
Investors in the bond will get an annual special dividend, Blockstream said.