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El Salvador’s Bitcoin City: What do you have to know about it?

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  • El Salvador’s president announced a plan for a completely Bitcoin (BTC) based city.
  • The city is intended to be a tax-free and no levies will be charged, except charging a value-added tax (VAT).
  • All financial transactions in this city can be done using Bitcoin.
  • The funding for the city will also be conducted using Bitcoin bonds.

A decade back, cryptocurrency funding a city might be unimaginable, but it is becoming a reality. The president of El Salvador, Nayib Bukele, recently announced the project for developing a “Bitcoin City.” During the Latin American Bitcoin and Blockchain Conference, he made this known and further noted that the city will be entirely financed and run using Bitcoin.

The ‘Bitcoin City’ plan

Bukele revealed the city would be powered by geothermal energy from the Conchagua volcano. This energy will also be used in the mining of cryptocurrency. In addition to this volcano, an additional source of power will be the Tecapa volcano’s thermal plant. What makes this announcement an attraction for many is the 0% CO2 emissions, as the power sources won’t cause any harm to the environment.

In addition to that, Bitcoin City will be tax-free except for a value-added tax (VAT). Hence, the citizens won’t have to face tax-related problems in this modern crypto-based city.  

The Bitcoin funds planned for this project will be managed by a blockchain tech provider firm, Blockstream. The project’s strategy officer, Samson Mow, said that $1 billion bonds would be used initially for this project. El Salvador’s government intends to start issuing these bonds in 2022. Once these bonds are issued, El Salvador’s government will invest half of it into Bitcoin, while the remaining half will develop the city’s infrastructure.

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The concept is to provide all necessities that a traditional city has. These include residential areas, commercial blocks, health facilities, educational institutes, entertainment areas, etc. It will be a perfect example of a modern city that is not only based on Bitcoin but will also be used in developing it. The central building of the city will resemble Bitcoin’s shape.

Though the project has been announced and the bonds will be issued soon, El Salvador’s government has not issued any specific timeline to start the construction of the Bitcoin city. However, the location of the prospective city has been specified, which is reportedly the La Unión region.

This project has attracted interested investors because of the perks that it promises. The city is estimated to cost about BTC 300,000 for construction. The additional dividend from investment in Bitcoin, other than those spent on construction, will be divided amongst the investors.

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Legal status of Bitcoin in El Salvador

El Salvador is the very first country in the world to recognize BTC as a currency legally. Before accepting Bitcoin as legal tender, El Salvadorans were already using the US dollar for two decades.

As a result of the legal recognition of BTC in El Salvador, the government has taken a step further to benefit from the growth of Bitcoin. As it is projected that the worth of Bitcoin will cross US$1 million in a decade, it will bring massive benefits to the investors. If the Bitcoin city project succeeds, El Salvador will likely become the center of the world’s Bitcoin market.

El Salvador’s government has worked on the promotion of digital currency. It has issued digital wallets to its citizens, which can be used for the purchase of items.

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A new future – Bitcoin-based economy

The establishment of the Bitcoin city could mark the start of a new era of an economy based on Bitcoin. Other counties are likely to follow the example, moving to smart cities. It will also help with the growth of Bitcoin, which has been on the uptrend since this year.

The world has already been struggling to make it a reality. El Salvador’s president has taken this huge step, setting an example for other states. Though it might take time for complete success, it will be a move changing the traditional concept of the economy.

Despite the prospects that this project brings with it, it is expected that it will cause protests. It is because of the inflation and instability that it might get into the country. This project promises to bring new jobs to the market, but the El Salvadorian public still seems divided over this issue.

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Though the prospects of this project are fifty-fifty because of fluctuations in BTC’s value, it will open up new opportunities for digital investments.

Conclusion

The Bitcoin City will bring enormous changes to the state-level economy and is considered a breakthrough. Though yet in the planning phase, it will have huge impacts on the future of crypto investments. It will also determine the trust of investors in these like projects. Considered a giant step, it will decide the fate of El Salvador because of the massive investments.

Like all good motivations and inspirations, some things can go south. Recently the president of El Salvador Nayib Bukele was attacked by the Ethereum creator, who believes that his move to adopt cryptocurrencies was accelerated. Vitalik Buterin, the ETH creator, also branded Bukele and his followers as extremists.

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Solana set to be the ‘Bitcoin Killer’?

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A blockchain with the ability to perform thousands of transactions per second must be the next Bitcoin. Sam Bankman-Fried believes SOL has the potential to become the next Bitcoin since the Solana blockchain can execute 50,000 transactions per second. 

Sam Bankman-Fried (SBF), in a recent interview with Kitco, praised Solana for its potential to expand to millions of transactions per second. According to the FTX CEO, this makes Solana a critical component of cryptocurrency acceptance and the next Bitcoin.

The scalability of Solana could aid its evolution into a new Ethereum or Bitcoin. 

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“I am optimistic about Solana. She has every chance of doing this, which is very interesting, I think.’

Analyst bullish on SOL

Influential investors are positive on Solana, which is helping altcoin gain traction. 

With a growth in institutional acceptance, venturefounder, a cryptocurrency analyst, feels that Solana could end up competing with Ethereum. 

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“More Crypto Online” cryptocurrency analysts are positive on Solana. As the cryptocurrency price trend reverses, analysts forecast a price rise to a new all-time high of $305. 

During the crypto massacre on Black Friday, the price of Solana fell below $200. The price of the altcoin has recovered and is now trading near $200 at the time of writing. Over the last two months, there has been a surge in institutional intake and capital rotation into Solana.

At the time of writing, SOL is trading at $196.63, up 0.6% in the last 24 hours.the resistance on the upside is at $199.94. However in case of a decline, the support on the downside is at $190.68.  

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El Salvador’s President Has A few Words For Bank Of England’s Chief

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El Salvador’s President has a few words for Bank of England’s chief who recently expressed worries about the country’s Bitcoin adoption.

Check out his relevant tweet below.

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A commenter said: “Before bitcoin nobody around the world cared about El Salvador now there are competing interests either supporting or attacking El Salvador. El Salvador is now relevant.”

Someone else posted this: “Exactly what i been saying! My family is from el salvador, and my whole life not a single soul i ever met here in the U.S even knew about the country, and if they did, they only heard of it because of gang affiliation… nothing else. Bukele is making waves!!!”

On the other hand, a follower said: “The Bank of England’s Point of Concern: “….It concerns me that a country would choose it as its national currency. What would worry me most of all is, do the citizens of El Salvador understand the nature and volatility of the currency they have.” Seems a legitimate worry.”

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Bitcoin adoption concerning?

CryptoSlate notes the fact that Bailey said the move to adopt Bitcoin within a dual currency system was concerning, while also adding that volatility would impact most detrimentally.

This isn’t the first time that Bailey warned of the “dangers” of crypto.

Back in May, Bailey said cryptos have no intrinsic value and that investors should be prepared to lose all their money.

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At the moment of writing this article, BTC is trading in the red and the king coin is priced at $54,667.

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Bitcoin skeptic Saule Omarova to be rejected as Biden’s nominee for OCC in win for crypto

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  • Saule Omarova was nominated to head OCC and it looked bleak for the future of cryptocurrencies as she is an outspoken critic of Bitcoin.
  • New reports reveal that some Democratic senators in U.S Congress will reject her, and with all Republicans united against her, she will most likely not assume office.

Saule Omarova, a Bitcoin critic who was nominated for one of the most important financial regulatory jobs in the U.S, is looking unlikely to go through Senate confirmation. According to new reports, some Democratic Senators have rejected the Biden pick, particularly opposing her hardline stance against big banks. With Republican Senators all against her, she looks unlikely to be the next Comptroller of the Currency.

Omarova was nominated by the White House in September to take over from the Acting OCC, Michael Hsu. As CNF reported at the time, the cryptocurrency community joined the banking fraternity to ask questions of what would be of her reign. Omarova is an outspoken critic of the big banks, having consistently criticized government bailouts. She has also suggested that the Federal Reserve should be allowed to serve Americans, effectively wiping out the commercial banks.

For cryptocurrencies, the future looked just as bleak. She has previously stated that she believes they “benefit mainly the dysfunctional financial system we already have.”

In her Senate grilling two weeks ago, she held on to her anti-Bitcoin views. Responding to crypto-friendly Senator Cynthia Lummis‘ question on whether Bitcoin threatens national security, she stated:

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I’m not an expert on Bitcoin but I’d worry if all our financial transactions were up to some blockchain system where various actors who might actually be located in other countries, not particularly friendly to us, control the functioning of the system.

Omarova to be rejected

According to reports in Washington, Omarova is set to be rejected in Senate. Already, virtually all Republican senators have said they will reject her. Many of them have even attacked her on personal terms, as well as her ‘socialist-leaning’ beliefs.

Axios reports that five Democratic Senators have joined the anti-Omarova bandwagon as well. The five told Ohio Senator Sherrod Brown, who heads the Senate Banking Committee of their dissent. If they vote against her, the Kazakhstan-born academic will stand virtually no chance as the house is almost divided in half between Republicans and Democrats.

However, despite the opposition, the White House continues to back her publicly. A White House official told Axios:

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The White House continues to strongly support her historic nomination. Saule Omarova is eminently qualified for this position. She has been treated unfairly since her nomination with unacceptable red-baiting from Republicans like it’s the McCarthy era.

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