El Salvador's president, Naguib Boukela, has announced that his country plans to build the world's first bitcoin city, initially to be funded through bitcoin bonds, increasing the Central American country's bet on the cryptocurrency.
At an event marking the end of a week to promote Bitcoin in El Salvador, Bukele said that "the city will receive energy supplies from Berkane and will not levy any taxes except for the value-added tax," according to Reuters.
"We will start financing in 2022, and the bonds will be available in 2022," Bukele told a crowd at the event.
“El Salvador will initially issue a $1 billion bond backed by Bitcoin to raise funds for the planned city,” said Samson Mao, chief strategist at blockchain technology provider Blockstream.
El Salvador, on September 7, became the first country in the world to legalize Bitcoin, along with the US dollar, despite the strong hesitation among the population and criticism from economists and international financial organizations.
The Salvadoran parliament, which has been overwhelmingly dominated by supporters of President Bukele since the last legislative elections, passed the bitcoin legalization law in June.
The law includes an obligation to “accept bitcoin as a method of payment,” and that the value of the digital currency “will be determined by the market.”
But a number of economists, along with the World Bank, the International Monetary Fund and the Inter-American Development Bank, expressed doubts and warned El Salvador of the dangers of taking this step, according to Agence France-Presse.
Abu Kila, who has been criticized for his authoritarianism and contempt for the separation of executive, legislative and judicial powers, accused the opposition of wanting to "intimidate" the population by criticizing Bitcoin.
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