Will the cryptocurrency city project in El Salvador be successful?
In June 2021, at a crypto conference in Miami, Salvadoran President Nayib Bukele made a groundbreaking announcement that his country would soon be the first to recognize Bitcoin as legal tender. The announcement went viral, with crypto Twitter praising the president as a visionary and forward-thinking ruler, while traditional institutions and the media reacted to the announcement with concern and disapproval.
Now, nearly a year later, El Salvador’s bitcoin bill has gone into full effect, and the president continues to invest in crypto and continues to accumulate BTC during each of the downturns that have occurred since then.
In addition, several other announcements have been made since the adoption of BTC as legal tender, including plans to build a “Bitcoin City”. The Bitcoin City project, which is planned to be built near the Conchagua volcano, was recently made public for the first time. Bukele published the model of the city on his Twitter.
Designed for BTC and crypto proponents, Bitcoin City will have no property taxes, income taxes, and municipal taxes. The only tax will be the value-added tax, which, along with operations to mine cryptocurrencies using volcano energy, appears to be the main source of income for the city government.
At the moment, only half of the shops in the city accept bitcoin. They are marked with a special sign on signs and doors. But only 14% of all enterprises made at least one sale for the main cryptocurrency, which indicates a lack of integration of cryptocurrencies into the life of the population. 90% of residents still prefer the dollar. Therefore, Bitcoin City remains a utopia for now.