El Salvador's president, a staunch Bitcoin advocate, said at a Bitcoin investment summit on Saturday that his country plans to build the first "Bitcoin City."
The city will be located in the eastern department of La Unión, between the municipalities of La Unión and Conchagua.
The start-up costs for the development of the so-called “Bitcoin City” will be funded initially by the issuance of billions of dollars backed by Bitcoin in 2022.
According to the president, the city of Bitcoin will depend on geothermal energy from nearby volcanoes and will be exempt from taxes, except for the value-added tax (VAT).
“Invest here and earn all the money you want. This is a totally ecological city that functions and is powered by a volcano.” said the president.
Half of the money raised through VAT would be used to pay bonds issued to finance the city's start-up costs, while the other half would be used to finance public services. It is estimated that 300,000 Bitcoins will be needed to complete the city's infrastructure.
There are still not many details on what exactly the "Bitcoin city" will be, but the leader hopes to attract foreign investment in Bitcoin to the city in the country that is increasingly involved with this asset.
Last month, El Salvador reported that its Bitcoin fund ran a $4 million surplus due to rising currency prices. But the country appears to have no intention of selling its reserves anytime soon, as just last month they added another 420 Bitcoins to the country's treasury, bringing El Salvador's Bitcoin total to 1,120 BTC.