The President of El Salvador, Nayib Bukele, is known widely as a strong supporter of bitcoin. He took to Twitter to make predictions on the growth of bitcoins. He predicted that very shortly, more countries will accept bitcoin as legal tender. Although he did not specify the names of the countries, he said that at least a couple of more countries will soon declare bitcoin as legal tender.
He went on to predict that the price of bitcoin will rise to $100,000. He predicted that bitcoins will also become an issue of major contention in the USA during the elections in 2022.
Bukele had earlier announced the start of construction on the ‘Bitcoin City’ project. He informed that the construction of the project would start in 2022. This will be the first project of its kind in the world. The bitcoin city project will be funded through the issue of a bitcoin bond.
The proposed bitcoin city is planned to be constructed on a site close to a volcano. The site is located adjacent to the Gulf of Fonseca. The government, under Bukele, hopes that the construction of the bitcoin city will spur El Salvador’s economic growth. The government hopes that the city will also attract substantial investment – assuming that the price of bitcoins will continue to rise.
In order to attract investors and investment, Bukele has announced that the residents of the city would be exempt all taxes. This includes the tax on income and property. Payroll taxes will also be exempt. In a unique move, he said that even capital gains will be exempt from taxation. These measures, he hoped, will attract foreign investment too.
He believes that fiat currency is limited in its power and the future lies with bitcoins. He hopes that El Salvador, by its early adoption of bitcoins as legal tender, will set an example for the world to emulate. The move to declare bitcoin as legal tender attracted criticism from the IMF and the national opposition.