Name? Nayib Bukele
Westphalian identity? Salvadoran
Age? 40
Why is he in the news? Last Sunday Salvadoran President Nayib Bukele announced his plans to establish a Bitcoin City at the base of El Salvador’s Conchagua volcano on the Pacific coast. After giving Bitcoin legal tender, Bukele removed El Salvador’s dependency on the US dollar. He now wants to build a circular city that uses the volcano to power it and its Bitcoin mining (it would even look like a Bitcoin!).
Why do we care? More than the fact that Bitcoin City sounds like an amusement park, Bitcoin City has an ecologically sustainable model and no property or income taxes. The young quasi-dictator wants to create the “Singapore of Latin America” that kills two birds with one stone: attract business with no taxes, create jobs with new businesses.
Why should you care? In case you missed it, tax havens came under fire this year (again). Bukele’s Bitcoin City, with its near nonexistent taxes and sketchy growing currency, is the perfect recipe for not just a tax haven—a tax sanctum. If you are not a big fan you should care 5/10; if you’re looking to evade taxes and perhaps make some more money (or not, do not take our financial advice) you should care 9/10 about this volcano-powered money miner.
Who else cares? Samson Mow, chief strategy officer of Blockstream. The blockchain provider is issuing Bukele a bitcoin-backed bond worth $1 billion. Half of the revenue gathered by the city’s VAT would go to fund the bonds, and the other to finance the city. Mow expressed Blockstream’s interest to issue bitcoin-backed bonds to 100 more countries.
Any further comments? Last week, the US Ambassador to El Salvador left the country, citing Bukele’s anti-democratic practices and Twitter attacks against the United States. But Bukele seems unfazed by Biden’s retreat and is instead focused on building up El Salvador to no longer depend on the US.
