El Salvador’s ambitious Bitcoin City project is gaining significant momentum following a historic $1.6 billion investment in the country’s port infrastructure. This development marks a major step forward in the nation’s strategy to integrate cryptocurrency into its economic foundation.
$1.6 Billion Port Investment: A Historic Move for El Salvador
The ports of Acajutla and La Unión are set to undergo extensive redevelopment, backed by a $1.6 billion commitment from Turkish port operator Yilport Holdings. This represents the largest private investment in El Salvador’s history and signals strong international confidence in the country’s economic direction.
A joint venture between Yilport and El Salvador’s Autonomous Port Executive Commission (CEPA) will manage both ports for the next 50 years. The partnership aims to modernize facilities and enhance operational capacity, which is critical for supporting future projects like Bitcoin City.
The Strategic Role of La Unión Port in Bitcoin City’s Development
The port of La Unión, whose construction began in 2005 but was never fully operational, is central to the realization of Bitcoin City. Located in the same region, Bitcoin City is designed to function primarily using Bitcoin, with exemptions from value-added tax (VAT) and other incentives.
President Nayib Bukele first announced plans for Bitcoin City in 2021, shortly after declaring Bitcoin legal tender in El Salvador. The project aims to create a special economic zone centered around cryptocurrency innovation, mining, and commerce.
The recent port investment has renewed optimism among officials at El Salvador’s National Bitcoin Office. They see the modernization of La Unión as essential for supplying materials, enabling trade, and attracting global investors to Bitcoin City.
Volcano Bonds and Public-Private Partnerships
Initial funding for Bitcoin City was intended to come from so-called “Volcano Bonds”—a type of Bitcoin-backed sovereign bond. These bonds were designed to be supported by Bitcoin mining operations using geothermal energy from the country’s volcanoes.
Although the bond launch faced delays, it received legislative approval in late 2023. Technical support was initially expected from firms like Blockstream and iFinex (affiliated with Tether). More recently, JAN3—a company founded by former Blockstream CSO Samson Mow—has committed to supporting the development of Bitcoin City.
The combination of public financing and private expertise underscores El Salvador’s innovative approach to national development and cryptocurrency adoption.
What This Means for the Future of Cryptocurrency in El Salvador
The revitalization of La Unión port is more than an infrastructure upgrade—it is a catalyst for broader economic transformation. With improved logistics and increased trade capacity, El Salvador is positioning itself as a hub for cryptocurrency and blockchain innovation.
Bitcoin City is expected to attract tech companies, investors, and digital currency enthusiasts from around the world. Its success could serve as a model for other nations exploring cryptocurrency-based economic development.
For those interested in tracking the progress of such innovative economic projects, this development represents a significant milestone in the fusion of traditional infrastructure and digital currency ecosystems.
Frequently Asked Questions
What is Bitcoin City?
Bitcoin City is a planned special economic zone in El Salvador where Bitcoin will be the primary currency. It will feature cryptocurrency mining, tax incentives, and commercial infrastructure designed to attract global tech companies and investors.
How is the port investment related to Bitcoin City?
The $1.6 billion investment in Acajutla and La Unión ports will enhance trade and logistics capabilities, which are essential for supplying and supporting the construction and operation of Bitcoin City. La Unión port is located near the proposed site of the city.
What are Volcano Bonds?
Volcano Bonds are Bitcoin-denominated sovereign bonds issued by the government of El Salvador. They are intended to raise funds for Bitcoin City and infrastructure projects, backed by Bitcoin mining revenue from volcanic geothermal energy.
When will Bitcoin City be completed?
There is no official completion date yet. Progress depends on several factors, including financing, construction timelines, and continued development of the port infrastructure. The recent investment accelerates these efforts.
Is Bitcoin still legal tender in El Salvador?
Yes, Bitcoin remains legal tender in El Salvador alongside the US dollar. The country continues to promote its use in everyday transactions and as a foundation for economic innovation.
Can international investors participate in Bitcoin City?
Yes, the Salvadoran government encourages foreign investment in Bitcoin City and related projects. Details regarding ownership, regulation, and participation are expected to be clarified as development advances.