El Salvador will issue the world’s first Bitcoin bonds for the construction of a new city called Bitcoin City. This was reported by Reuters with reference to President Salvador Nayib Bukele.
The Latin American head of state announced plans at the final event of the weekly campaign to promote cryptocurrencies. The first bonds through blockchain company Blockstream are expected to launch in early 2022.
El Salvador plans to raise $ 1 billion at an interest rate of 6.5% over a 10-year term. Half of the funds will be used to buy additional bitcoins; They will then be sold to provide investors with additional tokens as dividends.
The other half will be spent on the construction of “Bitcoin City” in the eastern region of the country of La Unión. Residents of the city will be exempt from all taxes except 10% VAT. It will be raised to pay for the bonds, as well as to form the city’s budget.
The city’s infrastructure includes mining farms for the production of cryptocurrencies. It is planned to supply them with electricity at the expense of a geothermal power plant.
El Salvador, thanks to its commitment to bitcoin, will become the “financial center of the world,” says Samson Moe, strategy director at Blockstream. He expressed his confidence that the investment will pay off due to the early investment in cryptocurrencies and their higher growth.
In June, El Salvador was the first in the world to recognize bitcoin as a means of payment, and in September it declared it an official currency at the same rate as the US dollar. Bukele said these steps will help the economy and, in particular, provide tax-free transfers from abroad.
In October, the first mining farms that use volcanic energy came into operation in El Salvador.
Spot previously wrote that the bitcoin blockchain system received the first update in 4 years and what has changed in it.
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