Nayib Bukele, President of El Salvador, remains bullish on Bitcoin even as the value of the cryptocurrency continues to fall. He recently took to Twitter to reveal his plans for Bitcoin City, a city with almost no taxes.
Cryptocurrencies are going through a rough patch with their value collapsing. Bitcoin, the most popular coin, its value against the US dollar slump by more than 50% just 6 months ago. With experts warning that the coin could fall further, people will be wary of buying it. But not Nayib Bukele.
Bullish about the Bitcoin
As billions of people lost in crypto trades every day, President Bukele is recovering more Bitcoins from the market. While that may still be a legit move, he also tweeted images of the architect’s vision of a Bitcoin City, gleaming in gold.
In November of last year, Bitcoin hit an all-time high when Bukele first revealed plans for the city. The city will be powered by harvesting energy from a volcano and will only have a value added tax to manage the municiple amenities & pay back money raised to construct-it.
Bitcoin city bonds
Expected to buy in early 2022, the bond has yet to be issued. While these bonds were supposed to be issued by the El Salvadoran government, they will now be issued by LaGeo, the geothermal power company, as the national government struggles to repay its debts, Vice reported.
Experts warn that LaGeo is unlikely to repay these bonds, but will still be allowed to issue as their failure will not reflect on national government. While the finance minister declared high investor interest in the bonds, Business Insider reported that the bonds did not attract a single investor.
When it launched Bitcoin as a legal tender last year, the El Salvador government also launched a digital wallet that can be used for people’s transactions. Vice reports that only 2% of remittances go to this wallet, and more than 70% of the population has “little or no trust” in bitcoin.
With little public & investor interest and a sword hanging on conventional debt, it remains to be seen how Bukele will finance the construction of his Bitcoin City.