Finance Monthly - December 2021

9 Finance Monthly. The Mon t h l y Round -Up nance. The president has said there will be no prop- erty, income, or municipal taxes and the city would produce net-zero carbon emissions. The city will be built with the intent of attracting foreign investment and will include residential ar- eas, shopping malls, res- taurants, and a port. “In- vest here and earn all the money you want,” Bukele said. The president of El Salva- dor has announced plans to create a “Bitcoin City” at the base of Conchagua Volcano. The geothermal energy from the volcano will be used to mine the cryptocurrency. President Nayib Bukele shared his vision for the city at the Latin American Bitcoin and Blockchain Conference over the weekend, just over two months after the country became the first in the world to officially adopt bitcoin as a legal form of tender. At the conference, Bukele said a bond offering would take place in 2022 entirely in bitcoin. He said construction of the city would get underway 60 days after financing was ready. Bukele plans to build the city near the Conchagua Volcano to take advantage of geothermal energy to power both bitcoin mining and the city itself. A pilot bitcoin mining venture is already being run by the government at another geothermal power plant beside the Tecapa volca- no. The only tax collected in El Salvador’s “Bitcoin City” will be the value-added tax, with half of this used to pay the municipal bonds and the rest used to pay for municipal in- frastructure and mainte- El Salvador to Build “Bitcoin City” at Base of Conchagua Volcano If a central bank digi- tal currency (CBDC) was introduced in the UK, then 20% of deposits could leave the commer- cial banking system, say Bank of England (BoE) of- ficials. Speaking at the Economic Affairs Committee in the Lords on Tuesday, Sir Jon Cunliffe, the BoE’s depu- ty governor for financial stability, said that the bank has made a “pru- dent assessment” of the 20% move. Cunliffe also said that banks could po- tentially lose a revenue stream from payments as a consequence of the move, adding that if banks are strong enough, they will be able to adjust to the change. Cunliffe also said that there is a future in cash too, stating it would have an anchoring role in the financial stability of sys- tems. Since April this year, a potential digital pound has been on the horizon. In September, the BoE brought in representa- tives from big names such as Spotify, ASOS, and Pay- Pal to consult on its CBDC Engagement and Technol- ogy forums. However, despite the po- tential of a digital pound approaching, Cunliffe warned that several issues need to be ad- dressed before any CBDC is introduced into the UK. He said that the BoE did not yet have visibility on predicted customer uptake as it is currently unaware of what a CBDC would mean for the coun- try’s economy. 20%Of Bank Deposits Could Move to Digital Pound, BoE Says