Bitcoin has been both the darling of cryptocurrency investors. Many countries and leaders are skeptical of the decentralized medium, and plan to impose regulations for digital tokens. However, some other ideas are being developed to promote development. One such nation is El Salvador. The country was famous for its announcement of bitcoin as legal tender. El Salvador President Nayib Bukele announced plans to create the first Bitcoin city in the world, using bitcoin-backed bonds as a way to increase bitcoin use.
It is safe to say that 2021 was a successful year for bitcoin investors. Bitcoin isn’t without controversy. There are still many issues to be resolved, including tax, environmental, and government regulations. The Bitcoin price reached record highs, but then retraced to lose 50% since the start of 2021. The recent trend is favorable for bitcoin investors.
After Bitcoin ETF’s debut on NYSE in November, the bitcoin price reached US$68,000 The massive price rise has led to institutional investors flooding in and acceptance by large-scale organizations. El Salvador President Nayib Bukele announced that a Bitcoin city will be built in an effort to reduce bitcoin’s value. This initiative is expected to offer hope to falling economies who might attempt to use bitcoin to bend deflation’s curve. Tech epicenters will also be able to come up with innovative ideas to keep the trend alive bitcoin.
El Salvador’s Bitcoin City: Explained
El Salvador was the first country to accept bitcoin as legal tender. Although opinions remain divided, President Bukele has devised a more intense plan to ensure that cryptocurrency remains legal in El Salvador. He announced that he will build a city entirely on bitcoin, which will be funded by a US$1billion bitcoin bond.
Bukele is optimistic that bitcoin will soon reach US$1,000,000. He wants to get his country on board the train before it’s too late. The administration of Bukele has high expectations for the virtual token. If they choose to take bitcoin up at the right moment, they believe it will spur investment and economic growth in the country.
The city’s bitcoin symboled plaza and the circle-shaped bitcoin city will be visible from the center of the sky. The city is planned to be located near the Conchagua Volcano and will use its geothermal energy for cryptocurrency mining as well as powering the region. El Salvador has a pilot bitcoin mining business that is operating near the Tecapo volcano.
The president made an impressive announcement about bitcoin city when he stated that residents do not have to pay income, property, capital gains or overall payroll taxes because it will be attracting foreign investments. They are exempt from VAT. Bitcoin city will include a main plaza and residential areas. There will also be malls, restaurants, and even an airport. El Salvador also plans to offer digital education, which will aid mainstream adoption of bitcoin.
The bitcoin bond will power the city, as mentioned previously. The allocated funds of US$1billion will be divided into two parts: half for building energy and mining infrastructure and the other half for purchasing bitcoins.
Leaders from Other Countries and Countries that are interested in Bitcoin/Crypto
Like institutional investors, the government’s initiative in bitcoin and other cryptocurrency is important for its development. Some leaders are now supporting the adoption of digital tokens. The inclusion of digital assets has been a hot topic among US Mayors. Eric Adams, New York’s mayor, announced that he would accept three bitcoin paychecks as his first three paychecks. He also supported the New York City launch of a digital currency.
Adams is not the only one who supports cryptocurrency adoption. While politicians are voicing their opinions on bitcoin, other countries are preparing to increase their cryptocurrency investment portfolios without much noise. Vancouver, Canada has gone the regulatory route to promote virtual currency. There are 40 ATMs that allow residents to buy and sell bitcoins. Many cities across the US, including San Francisco, New York, Miami, Miami and New York, are coming up with innovative ways to simplify bitcoin.
Why countries should start setting up their own Bitcoin cities?
There is no reason to miss the opportunity. Although countries in poverty may use bitcoin to help their development, they do so at their own risk. Other developed countries like the US or EU should consider a bitcoin city before it’s too late. This will allow them to keep their place in this race. It is important to keep in mind that bitcoin is volatile and can either take you up or push you down.