Every day, a garbage truck converted into a shuttle climbs the slopes of the Conchagua volcano in El Salvador to an ecotourism center. The truck roars along the cratered road, pushing the passengers who sat on it. At the top, they run into a sunlit forest, rewarded with spectacular panoramas of the Gulf of Fonseca and its deep blue.
The center in question was named El Espíritu de la Montaña (“Spirit of the Mountain”), referring to the belief of the Lenca Indians that a sacred presence resides in a dormant volcano, sometimes manifesting in the form of a butterfly or an eagle. Its owner, Luis Diaz, set out to improve the site seven years ago. But the peace he found there might not last.
In November 2021, the president of El Salvador, Nayib Bukele, announced that a completely new city – Bitcoin City – would appear on the volcano. A huge infrastructure project aimed at transforming this virgin forest into a bustling metropolis may soon see the light of day.
Computer-generated images provided by the government show a circular city organized around a central B-shaped esplanade and a Technicolor street plan that resembles something seen through a kaleidoscope. The local currency will be bitcoin, and the city will draw energy from the volcano thanks to geothermal energy. The only tax that residents would pay there is the tax on the goods and services they purchase.
To finance the project, El Salvador issues debt obligations for 1 billion dollars [995 millions d’euros] in the form of “volcanic connections”. Half of the proceeds from the sale of these bonds will be used to finance the construction of Bitcoin City and bitcoin mining operations, and the other half will be used to purchase bitcoins that could one day be used to repay the bonds if the price of the cryptocurrency tracks.
El Salvador’s Finance Minister Alejandro Zelaya said in early April that demand for the bonds is $1.5 billion and they will be issued soon, after some delays. [au début de mai, il a dit qu’il était urgent d’attendre “le bon moment” sur le marché des cryptomonnaies, en pleine crise]. Most of the titles are expected to be bought by crypto-investors – if they put up $100,000, some could get Salvadoran citizenship.
If it ever saw the light of day, Bitcoin City would be a brilliant embodiment of cryptosphere-building aspirations. However, the dream does not end there. A growing number of crypto investors are trying to convince other governments to create semi-autonomous zones that will serve as laboratories for economic experiments, arguing that such zones will promote growth and enrich the residents of the regions where they will be located.
But in Central America, foreign investors have in the past landed with promises of prosperity, only to end up grabbing land and getting rich in their own corner. The region has been economically exploited for a long time – the most striking example is the banana republics the first half of XXd century when [l’entreprise américaine] The United Fruit Company controlled land and political power in Honduras, Guatemala, and Costa Rica. More recently, the export processing zones that have sprung up for the benefit of the garment multinationals have housed factories where workers’ rights are being violated.
While some elected officials and residents believe in the potential of cryptocurrencies to revitalize the economy, others see the movement as a retelling of history. While El Salvador’s experience is shaping up to be Bitcoin City, a similar project is on the way in Honduras, but a resident uprising has put its future in jeopardy. Proponents of this model hope to build a hundred Bitcoin bridges, while others wonder who will actually benefit from these projects and whether the countries that are their laboratories will benefit.
The long-standing dream of an autonomous city
“Bitcoin citadels” have long captured the first investors and entrepreneurs in the cryptosphere. For some, it is inevitable that the value of cryptocurrency will explode and currencies will collapse, forcing wealthy investors to hide in fortified compounds to contain the barbarians. Others, enticed by the idea of a break with the concept of citizenship, see cryptocurrencies as a way to break free from the traditional financial system, which is tied to outdated concepts such as taxation or government spending.
The earliest attempts by libertarians to create self-sufficient mini-civilizations date back to at least the 1960s, but cryptocurrencies are reviving this long-held dream with lots of money and hype.
Cryptocurrency enthusiasts have already tried to give substance to their utopias, but with unsuccessful results. Take, for example, a sad episode from MS Satoshi (named after the pseudonym of Bitcoin creator Satoshi Nakamoto), a cruise ship that a group of libertarians bought to turn into a floating business center before being forced to sell it less than six months later; the much-derided Cryptoland project, the failed $12 million purchase of an island in Fiji that was supposed to be a haven for cryptocurrency enthusiasts; or even Akon City, R’n’B singer Akon’s $6 billion project in Senegal, whose groundbreaking is still pending.
These disappointments have not stopped a wave of investors from implementing bold projects aimed at creating cryptocurrency communities around the world. Their plans often include the creation of special economic zones. The principle is simple: create a quasi-independent jurisdiction with relaxed rules, limited government oversight and minimal taxes, and let the free market rule. Its promoters are Singapore, Dubai and Shenz