In Central America, the mirages of golden cryptocities

In Central America, the mirages of golden cryptocities

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 down the cratered road, jostling the passengers who have boarded it. At the top, they scatter into the sun-splashed forest, rewarded with striking panoramas of the Gulf of Fonseca and its deep blues.

The center in question was named El Espíritu de la Montaña (“Spirit of the Mountain”), in reference to the Amerindian Lenca belief that a sacred presence inhabits the dormant volcano, sometimes manifesting itself in the form of a butterfly. or an eagle. Its owner, Luis Diaz, undertook to enhance the site seven years ago. But the serenity he found there might not last.

The President of El Salvador, Nayib Bukele, announced in November 2021 that the volcano would host a brand new city, Bitcoin City. A vast infrastructure project aimed at turning this virgin forest into a bustling metropolis could soon see the light of day.

The computer-generated images presented by the government show a circular city organized around a central B-shaped esplanade, and a street plan in Technicolor that evokes what one sees when squinting through a kaleidoscope. The local currency would be bitcoin and the city would draw its energy from the volcano, thanks to geothermal energy. The only tax residents would pay there would be a tax on the goods and services they purchased.

To finance the project, El Salvador issues debt worth $1 billion [995 millions d’euros] in the form of “volcanic bonds”. Half of the proceeds from the sale of these bonds will be used to finance the construction of Bitcoin City and bitcoin mining operations, the other to buy bitcoins – which may one day be used to repay the bonds if the price of the cryptocurrency traced back.

Salvadoran Finance Minister Alejandro Zelaya said in early April that demand for the bonds was $1.5 billion and they would 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 shell out $100,000, some could be granted Salvadoran citizenship.

If it ever were to see the light of day, Bitcoin City would be the brilliant realization of the building aspirations of the cryptosphere. The dream doesn’t end there, however. A growing number of crypto-investors are trying to convince other governments to create semi-autonomous zones to serve as laboratories for economic experimentation, arguing that such zones would boost growth and enrich the inhabitants of the regions where they would be located. implanted.

But in Central America, foreign investors have arrived in the past with promises of prosperity, only to settle for land grabbing and enriching themselves in their own corner. The region has long been economically exploited – the most striking example being that of the banana republics of the first half of the XXe century, when [l’entreprise américaine] United Fruit Company controlled land and political power in Honduras, Guatemala and Costa Rica. More recently, export processing zones that have sprung up for the benefit of multinational clothing companies have hosted workshops where workers’ rights are violated.

While some elected officials and residents believe in the potential of cryptocurrencies to revive the economy, others see this movement as a retelling of history. At a time when the Salvadorian experience is taking shape in the form of Bitcoin City, a similar project is already on the way in Honduras, but the rebellion of the inhabitants has compromised its future. Proponents of this model hope to build a hundred Bitcoin Cities, while others wonder who really benefits from these projects, and whether the countries that serve as their laboratories will benefit.

The old dream of the autonomous city

The “citadels of bitcoin” have long captivated early investors and entrepreneurs in the cryptosphere. For some, it is inevitable that cryptocurrencies will see their value explode and currencies crash, forcing wealthy investors to hole up in fortified compounds to keep the barbarians at bay. Others, seduced by the idea of ​​breaking with the concept of nationality, see in cryptocurrencies a way of freeing themselves from a traditional financial system tied to obsolete notions such as taxation or public expenditure.

The earliest libertarian attempts to create self-sustaining minicivilizations date back to at least the 1960s, but cryptocurrencies are resurrecting that old dream with much cash and hype.

Cryptocurrency enthusiasts have already tried to give substance to their utopias, with poor results. Take, for example, the sad episode of MS Satoshi (name taken from the pseudonym of the creator of bitcoin, Satoshi Nakamoto), a cruise ship that a group of libertarians had bought to make it a floating business hub, before being forced to sell it less than six months later ; the much-mocked Cryptoland project, the failed $12 million purchase of an island in Fiji that was supposed to serve as a haven for cryptocurrency enthusiasts; or even Akon City, the 6 billion dollar project of R’n’B singer Akon in Senegal, whose laying of the first stone is still awaited.

These disappointments did not prevent a wave of investors from mounting bold projects aimed at creating crypto communities all over the world. Their plans often provide for the establishment of special economic zones. The principle is simple: create a quasi-independent jurisdiction with relaxed regulations, subject to limited supervision by the authorities and minimal taxation, and let the free market rule. Its promoters hold Singapore, Dubai and Shenz

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