El Salvador to Resume Bitcoin City Plans Post-Election, Boosting Crypto Economy

9 months ago 1

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El Salvador will reignite its Bitcoin (BTC) ambitions after citizens go to the poll on Sunday. President Nayib Bukele is expected to secure a landslide victory as the recent appreciation of El Salvador’s Bitcoin holdings guaranteed the much-talked-about Bitcoin City.

According to the country’s vice president, Felix Ulloa, the government will resume plans to construct the tax-free haven and launch Bitcoin bonds after Bukele’s recent gang crackdown all but guaranteed his re-election.

Bitcoin City Will Go Forward Despite IMF

Ulloa said Bukele has no plans to rescind these objectives even though the International Monetary Fund opposed the decision to make Bitcoin legal tender in 2021. The IMF brought up the topic when El Salvador was negotiating a billion-dollar loan.

“The majority of the package has already been agreed upon.”

El Salvador offers citizenship to foreigners who donate crypto to government development projects. These expatriates may favor moving to the new Bitcoin City, which will waive income taxes.

The country has also envisioned building a Bitcoin mining facility powered by geothermal energy. These plans could become feasible following the Bitcoin halving in April 2024. The reduction of mining rewards could entice miners to migrate to El Salvador, boosting the country’s economy.

Bukele Vaunts El Salvador Success

Bukele first floated plans to build a Bitcoin City at the height of the 2021 bull market. The plans were stalled when El Salvador’s Bitcoin turned red. Now, those plans to build the city appear on track, as the country reported unrealized gains of over $3 million in December 2023.

“After literally thousands of articles and hit pieces that ridiculed our supposed losses, all of which were calculated based on Bitcoin’s market price at the time, with the current Bitcoin market price, if we were to sell our Bitcoin, we would not only recover 100% of our investment but also make a profit of $3,620,277.”

A botched rollout of the country’s Chivo crypto wallet dampened enthusiasm and failed to gain traction with street vendors. Mobile operator Digicel reported on Sep. 19, 2023, that its SMS services crashed following onboarding requests from 28,000 new users.

However, incentives and the possibility of saving millions in remittance fees have seen the number of users rise to 1.1 million. The government offers $30 worth of BTC to any citizen who signs up.

Read more: Guide to Using Bitcoin Anonymously

In the meantime, the president of Argentina has delayed including crypto in a new economic reform. Javier Milei, who once gave Argentinians hope of an economic overhaul that championed financial sovereignty for each individual, has chosen not to legalize crypto holdings in the omnibus bill, the Law of Bases and Starting Points. However, he has promised not to interfere with the regulation of currencies by provincial governments.