President of El Salvador Nayib Bukele has announced that his government is planning to build an oceanfront “Bitcoin City” at the base of a volcano.

Bukele hopes to put the tiny Central American nation on the map as a new tax haven, to rival the likes of the Caymans, but with the added selling point that trading can be done exclusively in non-traceable cryptocurrency – which is legal tender since September.

While some critics fear the country’s adoption of Bitcoin will encourage more criminal activity, the president hopes to boost the country’s economy with the investor-friendly Bitcoin City.

The Salvadoran president made the announcement during a Bitcoin conference on Saturday evening.

A bond offering would take place in 2022 entirely in Bitcoin, said Bukele, wearing his baseball cap upside down. And 60 days after the financing was ready, construction began.

The city will be built near the Conchagua volcano to take advantage of geothermal energy to power both the city and Bitcoin mining – the power-hungry solving complex mathematical calculations day and night to verify currency transactions.

The government is already running a pilot Bitcoin mining company at another geothermal power plant next to the Tecapa volcano.

The oceanfront Conchagua volcano is located in the southeast of El Salvador, in the Gulf of Fonseca.

President of El Salvador Nayib Bukele has announced his government’s plan to build an oceanfront “Bitcoin City” at the base of the Conchagua volcano (pictured), using its geothermal energy to power the operation cryptocurrency mining

The ‘Bitcoin City’ will be built along the Atlantic coast of El Salvador (map shown), near the Conchagua volcano to attract investors with its low local taxes

A police officer from the Mayor’s Office patrols near the Chivo digital wallet machine, which will exchange money for Bitcoin cryptocurrency, right, in Las Americas Square in San Salvador, El Salvador, September 7, 2021 , the day when all companies must start accepting payments in Bitcoin, except those who do not have the technology to do so

The government will provide land and infrastructure and work to attract investors.

The only tax collected there will be the value-added tax, half of which will go to pay municipal bonds and the rest to municipal infrastructure and maintenance.

Bukele said there would be no property, income or municipal tax and that the city would have zero carbon dioxide emissions.

The city would be built with the idea of ​​attracting foreign investment in mind. There would be residential areas, shopping malls, restaurants and a port, Bukele said. The President spoke about digital education, technology and sustainable public transport.

“Invest here and earn all the money you want,” Bukele told the enthusiastic English crowd at the closing of the Latin American Bitcoin and Blockchain conference in El Salvador.

El Salvador President Nayib Bukele plans to encourage the use of Bitcoin as legal tender, which will lead to lower taxes in the Central American country

Protesters take part in a protest against the Bitcoin law in September this year in San Salvador, El Salvador. El Salvador became the first country to accept Bitcoin currency as legal tender, following the entry into force of the “Bitcoin Law” (Ley Bitcoin) two months ago

People protested against President Nayib Bukele’s policies on Independence Day in San Salvador, September 15. Thousands of Salvadorans demonstrated to demand that President Nayib Bukele respect the separation of powers and reject the introduction of bitcoin as legal tender, just after the country commemorated the bicentenary of its independence

Salvadoran army and guerrilla veterans march to protest the government’s economic measures in San Salvador in August this year. Social unrest prevails as citizens accuse government of Bitcoin-related misinformation and a sense of mistrust in the use of the currency

Bitcoin has been legal tender alongside the US dollar since September 7 after Bukele announced at a Bitcoin conference in Miami via a video message that El Salvador would be the first country to make the cryptocurrency legal.

The government is backing Bitcoin with a $ 150 million fund. To get Salvadorians to use it, the government offered $ 30 in credit to those who use its digital wallet.

Critics have warned that the currency’s lack of transparency could attract increased criminal activity to the country and that wild swings in the value of the digital currency would pose a risk to those who hold it.

Bitcoin was originally created to operate outside of government-controlled financial systems and Bukele says it will help attract foreign investment to El Salvador and make it cheaper for Salvadorans living abroad to send money. money to their families.

Concern within the Salvadoran opposition and outside observers has grown this year as Bukele decided to consolidate power.

Voters gave the hugely popular presidential party control of Congress earlier this year. The new lawmakers immediately replaced members of the constitutional chamber of the Supreme Court and the attorney general, leaving Bukele’s party firmly in control of other branches of government.

On June 5, Bukele declared that Bitcoin would be legally considered to be legal tender in the country. A few months later, the Bitcoin (Ley Bitcoin) law was passed to take effect on September 7, and businesses have been required to accept Bitcoin for all payments ever since.

In response to Bukele’s consolidation of power, the US government has said it will shift its aid from government agencies to civil society organizations.

This month, Bukele sent a proposal to Congress that would require organizations receiving foreign funding to register as foreign agents.