Dressed in pristine white in front of an audience of investors and foreign visitors, El Salvador’s president, Nayib Bukele, recently announced plans to create an oceanside “Bitcoin City” at the base of a volcano.
Bukele said his new urban center was inspired by the legendary cities built by Alexander the Great — except El Salvador’s would be fueled by cryptocurrency.
“This is not just a nice idea. It’s the evolution of humankind,” Bukele told the audience amid a display of lights, smoke machines, an AC/DC song and images that showed, among other things, his figure descending from a multicolored UFO, his face in maximalist proportions and a re-creation of the square that will be in the center of the new city. Seen from the air, the town square would show the Bitcoin sign.
But several analysts and experts say it’s impossible for a project of that magnitude to materialize in the coming years.
No technical plan for the project has been disclosed. Bukele promised that it will be very close to the Conchagua volcano, whose geothermal energy will power bitcoin mining, as well as the city’s needs.
“El Salvador has the natural resources to generate that energy, but it does not have the infrastructure. We must remember that we are one of the poorest countries in the region,” said José Miguel Cruz, the director of research at the Kimberly Green Latin American and Caribbean Center at Florida International University. “That money could be invested in health and education.”
Bukele said his planned city will be totally ecological and that it will have almost total exemption from taxes: Only a value-added tax will be charged — 13 percent — of which 6.5 percent will go to issue bonds to build the city, and the rest of which will be managed by the municipality for public services and other urban needs.
The incentives to attract investment to the country are a double-edged sword, analysts said, because the government lacks the institutional controls to detect and…
