El Salvador’s Bitcoin City

In Context

• El Salvador is planning to build an entire city based on the largest cryptocurrency Bitcoin.
• In September 2021, El Salvador became the first country in the world to adopt bitcoin as legal tender.

About El Salvador’s Bitcoin city

• Bitcoin city will be laid out in a circle (like a coin) and there will be a plaza in the city centre that will be host to a huge Bitcoin symbol.
  • There would be residential areas, malls, restaurants and a port in the Bitcoin city. 
  • In addition, the country will have access to “digital education, technology and sustainable public transportation.
• The city would be funded with the issuance of a $1 billion Bitcoin Bond.
• The city will be located along the Gulf of Fonseca near a Conchagua volcano to take advantage of the country’s geothermal energy— to power both the city and cryptocurrency mining (an energy-consuming process of solving complex mathematical calculations day and night to verify and add crypto coins to the Blockchain network).

• Significance: 
  • The city would be built with attracting foreign investment in mind.
  • The move aims to  spur the country’s economic growth and investment

What are Bitcoin Bonds?

• It represents the start of a reformation of capital markets, built on Bitcoin and layer-2 technologies like the Liquid Network. 
• Dividends can be distributed to investors instantly, with built-in cryptography to maintain confidentiality. 
• Bonds can be traded 24/7 with other assets like stable coins, using protocols that help eliminate the need for trust.
• Dividends will be paid easily to bondholders using tools deployed on top of the Liquid network. 

Source: IE