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Bitcoin is both the darling and evil to cryptocurrency investors. While many countries and leaders are skeptical about the decentralized medium and planning to impose regulations on digital tokens, a few others are coming up with innovative ideas to seek development. One such nation is El Salvador. Previously, the country became famous for announcing bitcoin as a legal tender. In a further move to intensify bitcoin usage, El Salvador President, Nayib Bukele, has announced the plan to build the world's first bitcoin city, funded by bitcoin-backed bonds.
As 2021 is coming to a close, it is safe to say that bitcoin investors had an eventful year and gained profit through it. However, bitcoin is not without controversy. Government regulations, environmental concerns, and tax issues are still in bag unsolved. Bitcoin price has experienced record-highs and retraced to hit 50% loss since the beginning of 2021. Fortunately, the recent trend is quite favorable for bitcoin investors. The bitcoin price touched US$68,000 after Bitcoin ETF made its debut in NYSE in November. Following the massive price rally, the inflow of institutional investors and acceptance by far-fledged organizations seem to be possible. In an advanced effort to streamline bitcoin value, El Salvador President, Nayib Bukele, has announced the building of a bitcoin city in the easter region of La Union. This initiative is anticipated to give hope for falling economies that might try their hand on bitcoin to bend the deflation curve. Besides, tech epicenters will also come up with ideas to consider bitcoin cities to not lose the trend.
El Salvador became the first nation to consider bitcoin as a legal tender. While people are still divided over that opinion, President Bukele has come up with a further intense plan to stronghold the presence of cryptocurrency in the country. He announced the decision to build an entire city on bitcoin that will be funded with the issuance of a US$1 billion bitcoin bond. Bukele believes that bitcoin will reach US$1 million in the future. Therefore, he wants to push his country on the train before it is too late. Bukele's administration has high expectations of the virtual token. They anticipate that bitcoin could spur the country's economic growth and investment if they take it up at the right time.
The bitcoin city will be laid out in a circle form and a bitcoin symboled plaza will be visible from the sky at the city center. Planned near the Conchagua Volcano, the city will take advantage of its geothermal energy and use it for cryptocurrency mining and the power for the area. However, El Salvador already has a pilot bitcoin mining venture running near the Tecapo volcano.
An impressive announcement about bitcoin city came from the president when he said that the residents don't have to pay any income, property, capital gains, or even overall payroll tax since it is expected to gain foreign investments. The only thing applicable for them is VAT. Besides the main plaza, bitcoin city will have residential areas, malls, restaurants, and even a port. El Salvador is also planning to provide digital education that will help mainstream bitcoin adoption.
As mentioned earlier, the bitcoin city will be powered by a bitcoin bond. Half of the US$1 billion allocated funds will be spent on building energy and mining infrastructure, while the other half will be used for buying bitcoins.
Similar to institutional investors, government organizations' initiative in bitcoin or any other cryptocurrency is also important for its growth. Fortunately, some leaders are coming out in favor of digital tokens' adoption. While Mayors across the US have been buzzing about the inclusion of digital assets, New York's Mayor, Eric Adams, has come out and told that he will accept his first three paychecks in bitcoin. With an ambition to make NYC the center of the cryptocurrency industry and other fast-growing disruptions, he also supported the launch of a New York City digital currency.
Besides Adams, others like Miami Mayor Francis Suarez, Missouri Mayor Jayson Stewart, Tennesse Mayor Scott Conger, and Florida Mayor Jane Castor is also in favor of cryptocurrency adoption. While leaders are coming out with their bitcoin opinions, countries are gearing up their cryptocurrency investment portfolio without much noise. For example, Vancouver, Canada, has taken the regulatory way to popularize the use of virtual currency. Residents easily buy and sell bitcoins in 40 ATMs. Many cities in the US including San Francisco, Amsterdam, Miami, New York, etc are coming up with disruptive ideas to streamline bitcoin.
The only reason is to not miss out on the trend. While nations suffering from poverty can take bitcoin as a tool to development, at their own risk, other developed nations like the US and EU countries should opt for a bitcoin city before it is too late. This will help them keep up their place in the race. But a note to remember is that bitcoin is still volatile and can both take you up and push you down.
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