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- Strategies to construct a Bitcoin city were announced by the El Salvador president Nayib Bukele.
- Development of the Bitcoin city will probably commence next year.
- Bukele declared that the Bitcoin City will be tax free.
President Nayib Bukele of El Salvador has announced bold strategies to build a Bitcoin City at the bottom of the Conchagua stratovolcano, which faces the Gulf of Fonseca.
The young president proposed the new Alexandria-like town might be funded by government-issued bonds supported by bitcoin, with geothermal power feeding the computer systems. Bukele’s preparations were compared to that of a James Bond antagonist in various newspapers, resulting in worldwide press attention.
First Ever Bitcoin Fortress?
The town’s development is slated to commence in 2022, with 50% of the $1 billion bond to be utilized to purchase bitcoin and the rest to fund power and bitcoin mining equipment. While the concept of a crypto fortress isn’t new — Miami Mayor Francis X. Suarez is working on his own strategy — this one has sparked the people ‘s interest, not only because bitcoin is legal cash in El Salvador. Furthermore, according to Bukele, the region would be densely filled with amusement facilities, clubs, eateries, museums, and possibly an airport.
The volcano, the power, as well as the bonds aren’t the more compelling aspects of the narrative. It is about the government’s proposals to rationalize digital currencies taxes by imposing an uniform 10% value-added tax (VAT) to support municipal building and functions. In other sense, there will be no income, or capital gains, or property taxes in Bitcoin City.
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Tax Free Bitcoin City?
Even though numerous nations have a popularity about being tax-friendly while talking about bitcoin and other cryptocurrencies, Bukele has taken one step ahead by declaring that El Salvador will “have no income tax, forever. No income tax, zero property tax, no procurement tax, zero city tax, and zero CO2 emissions.”
An anti money-laundering and crypto asset tax platform BloxTax’s CEO stated that, “There are many ‘tax free’ regions in the world. In many cases governments seeking to attract foreign capital investments (FDI) create what is called a ‘special economic zone’ (SEZ) — so this is not a new practice. The challenge is how do you attract foreign investors. Tax breaks are one thing but an economic zone needs to attract investments in infrastructure and development. The target is to create jobs. I am not sure that offering tax breaks is enough to attract large-scale employers to move and create factories or development centers in El Salvador.”
It is that citizens of the future Bitcoin utopia may amass as much money as they want without needing to pay the tax. Of course, they’ll still have to pay taxes on their spending on commodities and services, so it’s not quite a free handout. Regardless, Bukele appears to be vying for Michael Saylor’s title of globe ‘s greatest Whale.
Of course, the city is no stranger to advantageous Bitcoin tax legislation. In order to entice inward investment, El Salvador promised to exclude international investors from a tax on earnings from the digital asset’s investments ahead of the launch of Bitcoin City. The recent announcement is expected to resound with the same international businesses and entrepreneurs, as well as potential inhabitants of the nation’s southeast paradise.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
