El Salvador Updates: Bitcoin Bonds, as previously stated by Bukele, are intended to fund the city’s infrastructure.
• Bukele is moving ahead with ambitions to become a “Bitcoin City.”
• In March, El Salvador postponed the issue of BTC bonds.
• The city will most likely have its own airport.
El Salvador’s President, Nayib Bukele, has unveiled a blueprint for the proposed Bitcoin City, which would be built near the Conchagua volcano on the Gulf of Fonseca in the country’s south-east. Bukele posted photographs of the city’s urbanistic layout on his Twitter account with the caption, “BTC City coming along beautifully.” The concept, which was launched in November, depicts four detailed landmarks that are said to be constructed in the small Salvadorians municipality of La Unión.
Bukele didn’t provide any updates on a completion date, but did say that the city will be lush with greenery and surrounded by water. A night view, landmarks, and airports were also included in the scale model.
A photo of bystanders with a view of the volcano was also included in the model. Bukele had previously disclosed intentions to mine Bitcoin using volcanic energy in 2021. El Salvador’s president stated in October 2021 that the country’s new volcano mining plant had mined its first Bitcoin.
BUKELE PLANS TO SELL $1 BILLION (APPROXIMATELY RS. 7,725 CRORE) IN “BITCOIN BONDS” TO KICK START THE ENTERPRISE
Half of the revenues would be invested in Bitcoin, while the other half would be spent on infrastructure projects for the new city, in an innovative financial arrangement. Bond investors would receive half of any gains made by Bitcoin over the bond’s 10-year tenure.
Critics have pointed out that this system is absurd, given that those who want to invest in Bitcoin can do so directly and receive 100% of any profits. Bukele, on the other hand, is banking on the uniqueness of the bonds, which will be tokenized and sold on a Blockchain.
The government had planned to issue these bonds in March, but the government postponed them due to the economic upheaval created by Russia’s invasion of Ukraine. The bonds will be introduced in September, according to El Salvador’s finance minister.
However, if El Salvador’s financial situation does not improve quickly, it may become increasingly difficult to issue debt of any kind, since investors will be concerned about the danger of a default.