El Salvador President Nayib Bukele has revealed plans to build an oceanside “Bitcoin City” at the base of a volcano.
President Bukele used a gathering of Bitcoin enthusiasts to launch his latest idea, much as he used an earlier Bitcoin conference in Miami to announce in a video message that El Salvador would be the first country to make the cryptocurrency legal tender.
The city will be built near the Conchagua volcano to take advantage of geothermal energy to power both the city and Bitcoin mining – the energy-intensive solving of complex mathematical calculations day and night to verify currency transactions.
The government is already running a pilot Bitcoin mining venture at another geothermal power plant beside the Tecapa volcano.
The oceanside Conchagua volcano sits in southeastern El Salvador on the Gulf of Fonseca. The government will provide land and infrastructure and work to attract investors.
The only tax collected there will be the value-added tax, half of which will be used to pay the municipal bonds and the rest for municipal infrastructure and maintenance. President Bukele said there would be no property, income or municipal taxes and the city would have zero carbon dioxide emissions.
The city would be built with attracting foreign investment in mind. There would be residential areas, malls, restaurants and a port, President Bukele said. He talked of digital education, technology and sustainable public transportation.
“Invest here and earn all the money you want,” Mr Bukele told the cheering crowd in English at the closing of the Latin American Bitcoin and Blockchain Conference held in El Salvador.
Bitcoin has been legal tender in the country alongside the US dollar since September 7. The government is backing Bitcoin with a $150m (€132m) fund. To incentivise Salvadorans to use it, the government offered $30 worth of credit to those using its digital wallet.
Critics have warned the currency’s lack of transparency could attract increased criminal activity and that the digital currency’s wild swings in value would pose a risk to those holding it.
The president says it will help attract foreign investment and make it cheaper for Salvadorans abroad to send money home.