El Salvador develops further its bitcoin strategy

[paxmao]

El Salvador is putting to market a 1 Billion issuance of bonds with the objective of deploying an increased bitcoin infrastructure plus direct investments in bitcoin holdings. At least half to the proceedings from these "volcano bonds" are to be directly invested in purchasing bitcoin.

Bitcoin City is the flagship tokenised project of a tax free city funded by these 6.5% yielding bonds (currently in the CCC bond territory in my view - Trash debt AKA "High Yield").

https://www.reuters.com/markets/rates-bonds/el-salvador-plans-first-bitcoin-city-backed-by-bitcoin-bonds-2021-11-21/
https://www.bloomberg.com/news/articles/2021-11-21/el-salvador-plans-1b-in-tokenized-bitcoin-bonds-bukele-says

[jackg]

Yeah I don't think 6.5% is high enough for CCC bonds too, I've seen BBB ones at 8% over the past few years.

Also if they're declaring investing some into bitcoin then most of their investors might be trying to go into it charitibly or just not expecting good returns (at which they could just invest in bitcoin).

[Kyraishi]

I personally think that people will buy into the bonds just because of how much money printing are going on right now.

People and institutions will likely see this as one level higher than a junk bond just because of the fact that there is a clear roadmap as to what to do with this money, and El Salvador clearly has a good future going ahead with their BTC plan.

I don't necessarily think that centralizing BTC infrastructure in one country is good though...

[sunsilk]

I like that being tax free.

It's going to be one reason why the people of El Salvador would be investing into that bond. Aside from getting into bitcoin, their president is serious with all the advancement and potential that they can maximize for bitcoin.

This development is a good initiative and if it becomes a success, other countries that are eyeing for the same thing would probably have their test run for it.

[Rruchi man]

Despite the challenges that bitcoin and cryptocurrency is facing in other parts of the world,  It's really great to see that in a country like El Salvador, they are making advances at integrating bitcoin into domestic life and use. I like the fact that the president is an Innovative pioneer thinker not afraid to start /try out something new. The people of El Salvador will come to appreciate his efforts towards advancing them in the years to come.

[Darker45]

I was actually very excited when I read on the news that El Salvador will build a Bitcoin City with no income tax, no capital gains tax, no property tax, and no payroll tax. That is one giant step only a bold leader could make. I wonder how effective that would be in attracting investors. It is worth anticipating. But, either way, I really admire leaders who, for better or for worse, are decisive enough to make radical steps toward development.

By the way, both your sources are only accessible to registered or subscribed readers.

[KennyR]

I was actually very excited when I read on the news that El Salvador will build a Bitcoin City with no income tax, no capital gains tax, no property tax, and no payroll tax. That is one giant step only a bold leader could make. I wonder how effective that would be in attracting investors. It is worth anticipating. But, either way, I really admire leaders who, for better or for worse, are decisive enough to make radical steps toward development.

This is a big step forward in the cryptospace that no other country have taken initiative. El Salvador keep on doing something positive with bitcoin. The total population of the country is 6.5 million. To this population it is an easy thing to implement, and the leader too have taken a bold decision. The bold decision will surely attract more investors and business startups. Bitcoin City is a long time discussion, and finally El Salvador have made it come true.

[Darker45]

I was actually very excited when I read on the news that El Salvador will build a Bitcoin City with no income tax, no capital gains tax, no property tax, and no payroll tax. That is one giant step only a bold leader could make. I wonder how effective that would be in attracting investors. It is worth anticipating. But, either way, I really admire leaders who, for better or for worse, are decisive enough to make radical steps toward development.

This is a big step forward in the cryptospace that no other country have taken initiative. El Salvador keep on doing something positive with bitcoin. The total population of the country is 6.5 million. To this population it is an easy thing to implement, and the leader too have taken a bold decision. The bold decision will surely attract more investors and business startups. Bitcoin City is a long time discussion, and finally El Salvador have made it come true.

Props to Bukele for everything that's happening in El Salvador. Everything wouldn't have been possible had El Salvador not elected a millennial populist who has optimized all available leverage in pursuing a radical and somehow eccentric vision. It is not a curious case that this kind of initiative is happening only in El Salvador, and in so quick a time and somehow smoothly.

This is more about Bukele really. The perfect mixture of high popularity among the population, moderate authoritarianism among fellow leaders, and radical views in a man of a youthful and cool demeanor paved the way for everything that's happening now in the country.

Bitcoin is available to all the leaders of the world but it is only in El Salvador that it really unfolds to its extreme. The question was, how opposed are you against the established system? How far will you go to disrupt it? Not all leaders could answer these the way Bukele does.

[Poker Player]

Bitcoin City is the flagship tokenised project of a tax free city funded by these 6.5% yielding bonds (currently in the CCC bond territory in my view - Trash debt AKA "High Yield").

I heard the news last night. Just to point out it is not 100% tax free, it will have a 10% VAT tax. Which is not bad at all.

I hope the city will be a success and more places will want to copy it.

Faced with a model that has both political and economic power that wants to manage things from above, this model, in which the organization is built eminently from below with interpersonal relationships is the dream of the authors of the Austrian school.

I am not surprised that the project was initiated by Bukele and not by Biden and some other politician of the same style.

[cabron]

I was actually very excited when I read on the news that El Salvador will build a Bitcoin City with no income tax, no capital gains tax, no property tax, and no payroll tax. That is one giant step only a bold leader could make. I wonder how effective that would be in attracting investors. It is worth anticipating. But, either way, I really admire leaders who, for better or for worse, are decisive enough to make radical steps toward development.

This is a big step forward in the cryptospace that no other country have taken initiative. El Salvador keep on doing something positive with bitcoin. The total population of the country is 6.5 million. To this population it is an easy thing to implement, and the leader too have taken a bold decision. The bold decision will surely attract more investors and business startups. Bitcoin City is a long time discussion, and finally El Salvador have made it come true.

Props to Bukele for everything that's happening in El Salvador. Everything wouldn't have been possible had El Salvador not elected a millennial populist who has optimized all available leverage in pursuing a radical and somehow eccentric vision. It is not a curious case that this kind of initiative is happening only in El Salvador, and in so quick a time and somehow smoothly.

This is more about Bukele really. The perfect mixture of high popularity among the population, moderate authoritarianism among fellow leaders, and radical views in a man of a youthful and cool demeanor paved the way for everything that's happening now in the country.

Bitcoin is available to all the leaders of the world but it is only in El Salvador that it really unfolds to its extreme. The question was, how opposed are you against the established system? How far will you go to disrupt it? Not all leaders could answer these the way Bukele does.

Making him more popular in the media since he seems to be making noise because of this adoption he initiates. It's the determination of the leader to bring prosperity to thier nation. But I wouldn't say it all for him but he is making a big development in his country which is for all.

There are two ways so far that are being done for the city which is releasing tokens like Miamicoin and this bond backed by Bitcoin of El Salvador. So if any country or city wants to follow, I guess these two are thier models.

[Sterbens]

It should be appreciated how El Salvador's journey, which began some time ago and carried out further development, signifies their success in managing the people in the country to interact more actively with Bitcoin and now we have seen it used to.

Based on the article that you shared, I found a statement that is quite promising and will certainly be realized in the near future, as Bukele said:
"Invest here and make all the money you want," Just as short as that made me interested without thinking, if I lived there I might be part of those who invest.

[hyudien]

Since El Salvador adopted Bitcoin, various developments and improvements in the country have attracted quite a lot of attention. And every thing that Bukele president does will always be associated with Bitcoin which is the newest symbol for certain cities in El Salvador. The first city of Bitcoin, so I'm interested if one day we will visit there and show that it is a real city that we can visit.

[The Sceptical Chymist]

Man, the president of El Salvador is young, just judging by his appearance.  In a way, that's great to see because he may not have been jaded by the corrupt world of politics just yet and might also have some fresh ideas (like the one being discussed here). 

"Invest here and make all the money you want," Bukele said in English, dressed all in white and wearing a reversed baseball cap, in the beach resort of Mizata. "This is a fully ecological city that works and is energized by a volcano."

That sounds enticing, doesn't it?  I honestly don't know if I would take that statement at face value, because there are always some strings attached when someone says something like that--and in addition, the part about the volcano powering the operation comes off as being a bit crazy-like.

Half of the VAT levied would be used to fund the bonds issued to build the city, and the other half would pay for services such as garbage collection, Bukele said, estimating the public infrastructure would cost around 300,000 bitcoins.

Now that's a hell of a lot of bitcoin he's talking about there.  Makes me wonder where that bitcoin would come from, assuming things are actually paid for with BTC and not fiat.

[Hydrogen]

I like this part of the story:

Another exciting thing about the city would be the Bitcoin symbol that will be built at its center. El Salvador also said that they plan to build the city in a circle, just like a coin.

The Bitcoin city will also be a dream place for residents as it won’t have any income, property, capital gain, or payroll taxes.

https://techstory.in/el-salvador-plans-to-build-a-bitcoin-city-by-investing-500m/

No income, property, capital gain or payroll taxes!!?  

Sounds almost too good to be true. That is one way to attract whales and deep pockets into living in your country and city. To accomplish the polar opposite of capital flight.

Of course, politicians have made promises like this for a long time now. Even greece made big promises about the future of its solar power industry while in the midst of their great debt quandary.

Its easy to say and promise these things. Whether they become a reality is something else entirely.

[sheenshane]

Bitcoin City is the flagship tokenised project of a tax free city funded by these 6.5% yielding bonds (currently in the CCC bond territory in my view - Trash debt AKA "High Yield").

I heard the news last night. Just to point out it is not 100% tax free, it will have a 10% VAT tax. Which is not bad at all.

I thought there's no income tax to pay but if that there's 10% VAT tax isn't bad at all which is the result of a small amount to pay.

I wonder how their economy survives with the tax-free implementation and we know taxes are the source of which the economy has developed.

I'd nothing to say but good luck and I hope we saw a better result of this experiment of the El Salvador government.  So that other countries will follow to them and next to be a Bitcoin city.

[Darker45]

I wonder how their economy survives with the tax-free implementation and we know taxes are the source of which the economy has developed.

I think a place with 0 income tax, 0 capital gains, 0 property tax, 0 payroll tax, and 0 municipal tax will prove to be more vibrant economically than in places where everything is taxed. In such a scenario, I suppose investors will be attracted, businesses will thrive, jobs created, salaries high, goods and services affordable, workers living decent lives, and so on.

But this will all be at the expense of public services unless the government itself is not dependent on taxes, meaning it has other sources of revenue.

[AicecreaME]

El Salvador is putting to market a 1 Billion issuance of bonds with the objective of deploying an increased bitcoin infrastructure plus direct investments in bitcoin holdings. At least half to the proceedings from these "volcano bonds" are to be directly invested in purchasing bitcoin.

Bitcoin City is the flagship tokenised project of a tax free city funded by these 6.5% yielding bonds (currently in the CCC bond territory in my view - Trash debt AKA "High Yield").

https://www.reuters.com/markets/rates-bonds/el-salvador-plans-first-bitcoin-city-backed-by-bitcoin-bonds-2021-11-21/
https://www.bloomberg.com/news/articles/2021-11-21/el-salvador-plans-1b-in-tokenized-bitcoin-bonds-bukele-says

El Salvador never really fails to amuse us with its ever courageous initiatives. It's really nice to know that a leader that is bold enough to make a move regarding the development of its country and its advancement to modern technology still exists. I can say that not every leader has the guts to make a step like this because not everyone is as open-minded as Bukele in terms of what bitcoin can do to the country's economy.

Building a bitcoin city with a reasonable tax that is said to be 10% would be very beneficial to their economy. It could garner more investors and businesses to start and at the same time, people would benefit by investing in bonds. This is a wise decision for their country's and citizen's welfare. Delving into the realms of innovation and technology together with blockchain to back it up is a good start to attract more income-generating businesses that could boost their economic growth in no time. This just proves that we just really need to have a strong leader that could take the flow against the current to slowly and surely move forward. Hats off to Bukele and his fellow leaders that has the same mindset. I hope there would be more countries to follow the steps they already left for more prosperous nation. Definitely it would take time, but this one would be worth it most especially given it was done organized and well thought off.

[aysg76]

Man, the president of El Salvador is young, just judging by his appearance.

Not too young nor too old as he's 40 year old born on 24 july 1981 and good inspiration to the world leaders who have been in power for so long but still could not manage to take such decisions.

In a way, that's great to see because he may not have been jaded by the corrupt world of politics just yet and might also have some fresh ideas (like the one being discussed here). 

He have many fresh ideas to promote bitcoin growth in the country ranging from using geothermal power(not volcano actually) to mine btc and then use the profits to build 20 schools out of them and now he has came up with bitcoin city plan with only 10% Value added Tax (VAT) which is quite justified if we compare it to some other capital gain tax around the globe.But if we say about corruption then US department recently published a report in which 5 allies of El Salvador's president Bukele were deemed to be corrupt as we found in political hierarchy not surprised by this but he seems to revolutionise the country with diminishing dollar dominance and using Bitcoin as legal tender.

Now that's a hell of a lot of bitcoin he's talking about there.  Makes me wonder where that bitcoin would come from, assuming things are actually paid for with BTC and not fiat.

Yeah that's lot of Bitcoin as it's approximately 14.28% of the total btc supply of 21 million and it would cost him billion of dollars if he could manage to get such a big portion of supply.He has many plans ahead as he is young compared to world leaders and btc enthusiastic which is good news for the residents and this city is now big move on his part.

Samson Mow, chief strategy officer at Blockstream, said that there is a five-year lock-up on the bond which is designed to take $500 million of bitcoin off the market for that period of time.

Investors in the bond will get an annual special dividend, Blockstream said.

He is really determined to make some big moves with btc being the center of attraction.

[tygeade]

El Salvador is putting to market a 1 Billion issuance of bonds with the objective of deploying an increased bitcoin infrastructure plus direct investments in bitcoin holdings. At least half to the proceedings from these "volcano bonds" are to be directly invested in purchasing bitcoin.

Bitcoin City is the flagship tokenised project of a tax free city funded by these 6.5% yielding bonds (currently in the CCC bond territory in my view - Trash debt AKA "High Yield").

El Salvador president is a very young person, Nayib Bukele is 40 years old which means that dude is basically closer to our age by a big mile compared to most presidents in the world. Of course Europe is going younger, but look at USA for example. The last elections had two of the oldest presidential candidates ever and Biden is by far the oldest president as far as I know, even if not that old, he is still pretty old. This is why I believe that El Salvador is ahead of the curve right now, they do not have any problems within their nation that makes them stay behind and slowly build stuff, old politicians always react very slowly, and younger ones attack very quickly.

[arallmuus]

No income, property, capital gain or payroll taxes!!?  

Sounds almost too good to be true. That is one way to attract whales and deep pockets into living in your country and city. To accomplish the polar opposite of capital flight.

Obviously it is meant to lure in people to start and live in their country but at some point they might start to put up taxes although the tax rate will be significantly lower than most country. This was one of the reason most rich people or business owner start to move to Malta and he is basically copying that idea right now

I saw news where IMF warn El Salvador about the risk involved with bitcoin. Let's see how the world leader reacts to it.

Yeah right, IMF stands for International Monetary Fund so that means they will use whatever necessary means to get people to stay away from cryptocurrency and that is obvious