Crypto Economy Will Grow as El Salvador Resumes Plans for a Bitcoin City After the Election


Following Sunday’s election, the El Salvadorian government will go back to work on plans to build a Bitcoin City that is free of taxes and to issue Bitcoin bonds.

After Sunday’s election, El Salvador will get serious about Bitcoin (BTC). With the recent rise of El Salvador’s Bitcoin holdings guaranteeing the much-talked-about Bitcoin City, President Nayib Bukele is likely to earn a landslide victory.

Felix Ulloa, the country’s vice president, said that after Bukele’s recent gang crackdown, which almost ensured his re-election, the government would begin preparations to build the tax-free haven and introduce Bitcoin bonds.

According to Ulloa, Bukele remains committed to these goals, despite the fact that the International Monetary Fund was against the decision to recognize Bitcoin as legal cash in 2021. During El Salvador’s negotiations for a billion-dollar loan, the International Monetary Fund raised the subject. “We have already agreed upon the majority of the package.”

Foreigners who contribute cryptocurrency to El Salvador’s government’s development programs are eligible for citizenship. Since the new Bitcoin City does not impose any income taxes, these expats may be inclined to relocate there.

Additionally, the government has considered building a geothermal energy-powered Bitcoin mining facility. The halving of Bitcoin in April 2024 may make these ambitions a reality. If mining incentives are cut, El Salvador may attract miners who will bring money into the nation.

Bukele first proposed the idea of constructing a Bitcoin City at the peak of the 2021 bull market. El Salvador’s Bitcoin went red, which put a damper on the preparations. The nation recorded unrealized profits of more than $3 million in December 2023, so it seems like their plans to construct the metropolis are still on course.

“Given the current market price of Bitcoin, we would not only recoup our entire investment but also pocket a profit of $3,620,277—all after countless articles and hit pieces mocked our purported losses, which were based on the price of Bitcoin back then.”

Street sellers lost interest when the country’s Chivo cryptocurrency wallet had a rocky launch. On September 19, 2023, mobile provider Digicel said that its SMS services were down due to the onboarding of 28,000 new customers.

Nevertheless, the number of users has increased to 1.1 million, thanks to incentives and the potential savings of millions in remittance costs. Anyone who registers will get $30 worth of bitcoin from the government.

Also Read: African Development Bank’s Long-Term Strategy for Multi-Sectoral Growth

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