El Salvador’s president has announced plans to build the world’s first ‘Bitcoin City.’

At the weekend, president Nayib Bukele said that the city would be funded by bitcoin-backed bonds.

In September, Bitcoin became legal tender in El Salvador.

At the time, the value of the cryptocurrency dropped as protests and technical glitches were sparked by the launch of the digital asset.

“It’s going to include everything, residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, rail, everything,” said the president at an event ending a 7-day promotion of the cryptocurrency in El Salvador.

According to a report by Reuters, Bukele revealed that the city would be built in the eastern region of La Union and would use geothermal power from a volcano. He added that the city would not levy taxes except for VAT.

"Invest here and make all the money you want," he said at the event in the beach resort of Mizata. "This is a fully ecological city that works and is energised by a volcano."

Bukele said that half of the VAT collected would fund the bonds issued to build the society, according to the news agency. The other half would pay for services, including rubbish collection. The president predicts that public infrastructure for the city would cost roughly 300,000 bitcoins.

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.

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