El Salvador’s millennial president has released a model of his planned “Bitcoin City”, the world’s first dedicated cryptocurrency trading hub that will be powered by geothermal energy from a volcano.
According to the model, the city will have a giant Bitcoin logo in the central plaza, while a metallic walkway crowns the volcano like a halo.
But the sharing of the plans comes just as Bitcoin, the world’s most traded cryptocurrency, crashes, losing roughly half its value over the last week, reigniting the criticism of President Nayib Bukele’s high-stakes cryptocurrency gamble.
Last year, El Salvador became the first nation in the world to make Bitcoin legal tender. This prompted the International Monetary Fund to warn Mr Bukele, a 40-year-old former marketing executive and businessman, that Bitcoin’s rollercoaster price fluctuations put the country’s battered economy at risk.
Rating agencies Fitch and Moody’s have this year reduced El Salvador’s credit ratings to their lowest grade while categorising the country’s bonds as “junk”. Some are now warning that El Salvador could default on an $800 million loan payment due in January as a result of Mr Bukele’s Bitcoin push.
Yet the president, a prolific social media user, is doubling down, on Tuesday ordering his economy ministry to buy 500 more Bitcoins to add to its existing reserve of 1,801 Bitcoins, saying that the Central American nation had “bought the dip”.
A few hours later, Mr Bukele then bragged that he could make a profit of $11 million by immediately selling his new Bitcoins but preferred to hang on to them. The 500 Bitcoins will have cost nearly £30 million. But that is just half of what they would have been worth a week ago.
El Salvador just bought the dip! ��— Nayib Bukele (@nayibbukele) May 9, 2022
500 coins at an average USD price of ~$30,744 �#Bitcoin
Mr Bukele has been dogged by allegations of authoritarianism and populism, including persecuting critical journalists, firing a prosecutor who was investigating him, sending armed soldiers into the national assembly ahead of a key vote and secretly negotiating an illegal truce with El Salvador’s uber-violent “mara” street gangs.
He is currently immersed in a brutal crackdown of the “maras” following a recent upsurge in murders. Thousands have been locked up and paraded for the TV cameras handcuffed and wearing just their underwear.
Human rights groups warn that Mr Bukele’s government now routinely violates the rights of legitimate gang suspects while also sweeping up thousands of innocent bystanders who have nothing to do with the “maras”.