El Salvador intends to build a ‘Bitcoin City’ in the east of the country

El Salvador’s vice president has announced plans to build the world’s first bitcoin city, with the initial cost of building the city “financed” by bonds backed by the cryptocurrencies.

The El Salvador government has said the bonds will be issued next year (2022).

According to Reuters, the President of the Latin American country said in a speech on Saturday (November 20) that the location of this city in the eastern part of “La Union” is considered to be that its thermal power will be provided from the center of the earth and from a volcano. ; It is also said that no taxes other than VAT will be levied in this city.

“Invest here and make as much money as you want; this is a completely ecological city powered by a volcano,” said the El Salvador president, speaking in English.

He said half of the revenue raised through value-added would go to issuing bonds to build the city, and the other half would be spent on infrastructure services such as garbage collection; The cost of urban infrastructure is estimated at 300,000 bitcoins.

Including $ 60,000 bitcoins, that equates to $ 18 billion; The price of this currency code in this morning’s transactions was about $ 58,800.

The president of El Salvador likened the city to the cities founded by Alexander the Great and said that the city of Bitcoin has an airport, commercial and residential areas, as well as a central square where the symbol of Bitcoin will be visible from the sky.

In June of this year, Latin America became the first country in the world to recognize and legalize transactions for the purchase of goods and services with the cryptocurrency Bitcoin.

This rule means that businesses must accept bitcoin to offer goods and services unless they are unable to complete the transaction due to technical constraints.

El Salvador’s economy is heavily dependent on remittances; This money makes up about 20% of its GDP.

More than 2 million citizens of this country live abroad who have maintained close ties with their homeland due to culture; These migrants are estimated to send a total of $ 4 billion a year to their home country.

“Colon El Salvador” was the national currency of the country until 2001, when its value decreased, the US dollar was recognized as the currency in this country, and now bitcoin has been added to it.

The move comes as many governments are hesitant about the popularity of bitcoin.

The highest value of bitcoin will return earlier this month (November 2021) when the price reached about 68 thousand dollars.

El Salvador is the first country in the world to officially use bitcoin in transactions

El Salvador is the first country in the world to recognize and legalize the exchange of funds for the purchase of goods and services with the cryptocurrency Bitcoin.

With 62 votes out of 84, the US Congress voted in favor of the President’s proposal to legalize the acceptance of this currency code in financial transactions.

The President of El Salvador has said that his government has taken a historic step and that El Salvadorians living abroad can send money more easily.

With the vote of the Congress, this law will be effective for another 90 days.

“Colon El Salvador” was the national currency of the country until 2001, when its value decreased, the US dollar was recognized as the currency in this country, and now bitcoin will be added to it.

The new law means that businesses must accept bitcoin to offer goods and services unless they are unable to transact due to technical constraints.

“I will bring investment, tourism, initiative, economic development and financial inclusion to my country,” said El Salvador President Buclae before the proposal was approved.

He had previously said the move would open financial services to 70 percent of El Salvadorians who do not even have a bank account.

El Salvador’s economy is heavily dependent on remittances; This money makes up 20% of its GDP.

More than two million citizens of this country live abroad who have maintained close ties with their homeland due to culture; These migrants are estimated to send a total of $ 4 billion a year to their home country.

The move could, of course, have its drawbacks, including the country’s $ 1 billion request from the International Monetary Fund, which may be affected by the law.

El Salvador’s move comes at a time when former US President Donald Trump has called bitcoin a “scam”.

“I do not like (bitcoin) because it is a competitor to the dollar,” he said.

El Salvador’s move comes as many governments seek to establish their own national cryptocurrencies, fearing the spread of bitcoin; Including Britain, which two months ago announced a plan to release “Britcoin”.

Over the past year, and especially after the support of the CEO of Tesla for this currency code, the price of Bitcoin has jumped sharply.

The highest value of bitcoin dates back to mid-April this year, when the price crossed $ 63,000, but later fell in value, and Tesla’s withdrawal in acceptance due to “climate” concerns caused it to fall.

El Salvador wants to legalize digital currency for transactions and exchanges

El Salvador’s economy now relies heavily on remittances or remittances, which account for about 20 percent of the country’s gross domestic product.

More than 2 million of its citizens live abroad, who still maintain contact with their place of birth and send more than $ 4 billion annually to El Salvador.

Ways to send money to El Salvador Currently, there is a fee for each transfer, and sometimes it may take a few days and eventually the person will have to apply in person to receive it.

But the new path, he said, “will have a positive impact on the lives of millions.”

However, he did not provide further details on how to use digital currencies.

Bitcoin, which is a virtual asset and has no direct connection to the real economy, has seen a lot of volatility in recent years.

Most of the world’s central banks are considering creating their own digital currency, and in April this year the Bank of England announced that it was looking to create a digital currency that could be used in addition to cash and bank deposits.

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