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FILE PHOTO: A sign reads, "Bitcoin accepted here", outside a store where the cryptocurrency is accepted as a payment method in San Salvador, El Salvador, Sep 24, 2021. (Reuters/Jose Cabezas) - 

El Salvador plans to build the world's first "Bitcoin City" which will be funded initially by bitcoin bonds, President Nayib Bukele said on Saturday (Nov 20), doubling down on the Central American country's bet on the cryptocurrency.

Speaking at an event to mark the close of a week to promote bitcoin in El Salvador, Bukele said the city planned in the east of the country would get its energy supply from a volcano and would not levy any taxes except for value added tax (VAT).

"We'll start funding in 2022, the bonds will be available in 2022," Bukele told a cheering crowd at the event.

Speaking alongside Bukele, Samson Mow, chief strategy officer of blockchain technology provider Blockstream, said El Salvador would initially issue a US$1 billion bond backed by bitcoin to begin raising funds for the planned city.

El Salvador in September became the first country in the world to adopt bitcoin as legal tender//CNA