El Salvador plans to build a ‘Bitcoin City’ and mine crypto using volcano energy

El Salvador announced Saturday plans to create a “Bitcoin City” near a volcano funded by the cryptocurrency, the President said. Also, the country plans to partner with Blockstream, a digital assets infrastructure company, to raise about $1 billion via a “Bitcoin Bond.”

The Central American nation plans to build a “Bitcoin City” near the Conchagua volcano that the cryptocurrency will fund, President Nayib Bukele announced on Saturday. The city in southeastern El Salvador will have residential and commercial areas, services, entertainment, restaurants, and an airport.

Construction will begin in 2022, and the city will have no taxes except value-added tax (VAT).

Back in June, El Salvador became the first country in the world to accept Bitcoin as legal tender. But not all of its population is ready to adopt it. Thousands of people protested against the law in September, fearing the cryptocurrency could lead to instability in the country.

Also, El Salvador has launched a Bitcoin wallet – Chivo – to allow citizens to use the cryptocurrency. President Bukele has been claiming that it has “over half a million users,” or around 8% of the country’s population. However, some technical issues had blighted its launch.

Moreover, El Salvador plans to raise about $1 billion via a “Bitcoin Bond” in partnership with Blockstream, a digital assets infrastructure company. The government said that half of the funds would be used to buy Bitcoin, while the other $500 million will go toward energy and Bitcoin mining infrastructure.

Mining is the energy-intensive process of creating Bitcoin, which environmentalists often criticize due to its impact on nature. That’s why El Salvador announced it plans to use geothermal energy from the volcano to power this. Back in October, President Bukele released a video showing a geothermal facility with Bitcoin mining machines operating on the side of a volcano.

By words of Blockstream’s chief strategy officer Samson Mow, 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. According to Blockstream, investors in the bond will get an annual special dividend.

Earlier, Bukele also reported that the 200 Bitcoin ATMs installed in different parts of the country “work perfectly,” as well as the 50 ATMs that were placed in the US cities of San Francisco, El Doral, Atlanta, Chicago, Dallas, El Paso, Houston, Laredo, and McAllen.