Engadget Logo Japanese version of Engadget El Salvador announces the construction of "Bitcoin City", a city for Bitcoin.Preferential treatment such as tax system

The original cryptocurrency Bitcoin, which has been swelling to a price of about 6.6 to 6.8 million yen for a while, the price at the time of the Mt.GOX incident (February 2014) was about 18,000 yen per BTC If you think about it, you might want to hit your head warmly if you think that you can get even 10 BTC by going against the world at that time, but it seems that the base of Bitcoin is still expanding. is.

President Nayib Bukele in June passed a bill to make Bitcoin a legal tender alongside the US dollar, instructing the use of a geothermal power plant near the Conchagua volcano for cryptocurrency mining. And this time, he announced that he will build a new city called "Bitcoin City" in the vicinity of the geothermal power plant and the city of La Union. It includes "residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airports, ports, railroads, etc."

The president explained that although the residents of Bitcoin City have value-added tax (VAT, consumption tax, etc.), income tax is not levied, half of the tax revenue is "to build the city" and the other half is "clean the city". It is said that it will be used for "to keep it in place".

Although the start and completion date of the city's construction has not been disclosed, it is estimated that the cost of developing much of the public infrastructure will be about 300,000 BTC, which is about 2 trillion when converted to the BTC price at the time of writing the article. It seems to be about a circle. So he also announced a billion-dollar "Bitcoin bond," half for building energy and mining infrastructure, and the rest for buying more cryptocurrencies.

Samson Mow, head of strategy for blockchain infrastructure company Blockstream, said El Salvador will begin selling its cryptocurrencies five years later and will pay bondholders additional dividends. The initial yield is 6.5%, and as expected, if cryptocurrencies continue to rise, there is a possibility that they will generate considerable profits.

Since El Salvador decided to use Bitcoin as legal tender, it has purchased a total of 400 BTC in two installments in September. The government-approved wallet app "Chivo" is distributed to the public along with Bitcoin worth $ 30, which allows you to pay, send, and receive in dollars or BTC. It is also reported that more than 200 Bitcoin-compatible ATMs have been installed in Japan.

El Salvador has become more dictatorial by the Bukele administration, and the president calls himself "the coolest dictator." That is why it can be said that it is possible to push forward with a policy that has been completely swung to Bitcoin, which should be somewhat unstable as a currency. However, of course, there are voices of opposition among the people, and protests have been held several times regarding the legal tenderization of Bitcoin. Also, it seems that some companies that have been forced to support Bitcoin are dissatisfied.

It is unclear whether residents, investors and entrepreneurs will gather in the city where Bitcoin is at the center of the economy, although tax benefits are available. It's an unknown territory, and it's still unclear if the support needed to make this project a success is plentiful.

Source: BBC

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