--- title: "El Salvador President Announces “Bitcoin City” Tax Haven" description: "El Salvador's president Nayib Bukele has announced the country's plans to build the world's first fully bitcoin bonds-backed \"Bitcoin City.\"" date: "2021-11-22" modified: "2021-11-22" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/the-byte/el-salvador-president-announces-bitcoin-city-tax-haven" categories: - "Bitcoin" - "Blockchain" - "Cryptocurrency" - "Future Society" tags: - "bitcoin" - "cryptocurrencies" - "el salvador" - "the digest" --- # El Salvador President Announces “Bitcoin City” Tax Haven ![El Salvador's president Nayib Bukele has announced the country's plans to build the world's first fully bitcoin bonds-backed "Bitcoin City."]() *\Image: MARVIN RECINOS/AFP via Getty Images\* ## Bitcoin City El Salvador's president Nayib Bukele [has announced]() plans to build the world's first fully crypto-backed "Bitcoin City." Bukele [made the announcement]() over the weekend as part of a cringe-inducing live show featuring bright concert-style lighting — and even [tacky CGI UFOs](), for some reason. He says Bitcoin City will be income, property, and capital gains tax free, and be funded by El Salvador issuing $1 billion worth of tokenized bonds. Half of that will be used to build the city, and the other half will be used to buy Bitcoin on the market, [*Reuters* reports](). A value added tax, however, will take care of city services and infrastructure, which alone would cost 300,000 in Bitcoin or approximately $17 billion. It's a gigantic gamble, built on the premise that Bitcoin will continue to appreciate in the long term, allowing the country to repay its new debts. In other words, just another day in the mad world of crypto. "Invest here and make all the money you want," Bukele said during the event, which took place at a beach resort. "This is a fully ecological city that works and is energized by a volcano." ## Tax Haven Bukele was referring to a Bitcoin mining facility the country [opened this year]() that runs entirely on geothermal energy from a nearby volcano. El Salvador also [became the first country]() in the world to accept Bitcoin as legal tender this year. Creating a crypto tax haven shouldn't come as much of a surprise, then — it's arguably the logical conclusion. Bukele has huge plans for the city, going so far as to compare it to Alexandria in his speech, a city founded by Alexander the Great himself. "This is going to make El Salvador the financial center of the world," he added. "The first countries that do this will have a massive advantage," Bukele said during the event. "This is the beginning of nation state Bitcoin FOMO." Whether his massive bet on crypto will work out, however — instead of folding like a house of cards during the cryptocurrency's next bust cycle — is still anything but clear. **READ MORE:** [El Salvador plans first 'Bitcoin City', backed by bitcoin bonds]() \[*Reuters*\] **More on El Salvador:** *[In Response to Dip, El Salvador Buys a Bunch More Bitcoin]()* ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()