Building Bitcoin City: Progress and Setbacks
El Salvador, the first nation to recognize Bitcoin (BTC) as legal tender in September 2021, is now focused on its ambitious plan to establish a Bitcoin City. Despite the initial excitement surrounding the project, several delays and disruptions have emerged since its announcement, primarily driven by the recent bear market and ongoing geopolitical tensions.
Investment Strategy: First Come, First Serve
In an interview with Cointelegraph, Héctor Enrique Celarié Landaverde, the deputy ambassador of El Salvador to the Kingdom of the Netherlands, outlined the government’s strategy for attracting investment. Landaverde stated that the investment model operates on a “first come, first serve” basis, granting early investors better returns on their contributions. He emphasized, “The dream of El Salvador is to have a Bitcoin City and from there to make our society bigger, stronger. We are trying to attract more and more investments to this area so we can develop these communities.”
Impact of Bitcoin in El Salvador
According to Landaverde, the incorporation of Bitcoin into the Salvadoran economy has yielded measurable impacts, with positive changes in the lives of citizens. He invited international observers to visit El Salvador and witness firsthand the transformative power of cryptocurrency within the nation.
Funding Through Bitcoin Volcano Bonds
The concept of Bitcoin City was initially unveiled in November 2021 and is designed to be partly funded by the issuance of $1 billion in Bitcoin-backed volcano bonds, which are touted as the world’s first cryptocurrency sovereign-debt product. The bonds captured widespread attention during the recent bull market; however, subsequent delays and the broader economic downturn have raised questions about their viability.
Updates on the Bitcoin Bond’s Issuance
Last month, Paolo Ardoino, Chief Technology Officer at Bitfinex, indicated to Cointelegraph that the issuance of these bonds is contingent upon the government’s approval, which would follow the passing of the anticipated digital securities bill. That bill was scheduled for September, but as of mid-October, no further updates regarding the launch of the Bitcoin bonds have been issued.
Conclusion
The vision of Bitcoin City in El Salvador presents a pioneering approach to integrating cryptocurrency within a national economic framework. However, the road to realization is fraught with challenges. Continued investment interest and supportive legislation will be crucial as El Salvador seeks to navigate the uncertainties of the cryptocurrency market and fulfill its ambitious project.
