After El Salvador announced in June a bill to legalize bitcoin, President Naib Bukele directed that geothermal power plants near Conchagua Volcano be used for cryptocurrency mining. In this way, it was announced that a new street called Bitcoin City would be built in the area near the geothermal power plant and Launion Street on the east coast. It includes residential and commercial areas, services, museums, entertainment, bars and restaurants, airports, ports, railroads and more.
It is said that there is a value-added tax on Bitcoin City orders, but no income tax. It is said that half of the tax revenue is used to make the streets, and the other half is used to keep the streets clean.
Although the start or completion date of the city’s construction has not been disclosed, it is said that the cost of overhauling most of the public infrastructure is expected to be 300,000 BTC. At the same time, it is said that it will release 1 billion USD worth of Bitcoin bonds, use half to build energy and mining infrastructure, and use the rest to purchase cryptocurrencies.
Blockstream, a blockchain infrastructure company, has announced that it will pay additional dividends to bond holders, starting with the sale of its cryptocurrencies in El Salvador five years later. The original rate of return was 6.5%, as expected, and there is a possibility of generating significant profits if cryptocurrencies continue to rise in the future.
After El Salvador decided to use Bitcoin as a fiat currency, it purchased 400 BTC in two installments in September. To the public, Chivo, a government-approved wallet app, was distributed along with $30 worth of Bitcoin. This app allows you to pay, send and receive dollars or BTC. In addition, more than 200 Bitcoin-compatible ATMs have been installed in Korea.
In El Salvador, the Bukele regime has strong dictatorship colors, and the president calls himself the most wonderful dictator. Therefore, it can be said that the policy can be pushed to this extent for Bitcoin, which is a little unstable as a currency. However, of course, there are voices against it among the people, and there are several protests against the legalization of Bitcoin. Also, some of the companies that have been forced to respond to Bitcoin are complaining.
Even if the tax exemption is out of the question, it is unclear whether residents, investors, or entrepreneurs are gathered on the street where Bitcoin is the center of the economy. This is an unknown area and it is not yet clear whether the support needed to make this project a success is sufficient. Related information can be found here.