$1.6B port investment could revive El Salvador’s Bitcoin City plans

Turkish port and terminal operator Yilport Holdings has committed $1.6 billion to two port projects in El Salvador. This is the largest private investment in El Salvador’s history and could finally bring the Central American country’s ambitious Bitcoin City into being.

Salvadoran President Nayib Bukele announced the deal in a video on his X account. Yilport and El Salvador’s Comisión Ejecutiva Portuaria Autónoma (Autonomous Port Executive Commission, CEPA) will operate the Acajutla and La Unión ports in a joint venture for 50 years.

The Port of Bitcoin City

Construction of La Unión port was started in 2005 but the port was never launched, according to the video on Bukele’s X account. La Unión is the site of the proposed Bitcoin City. Bukele announced the development of the Bitcoin City in 2021, just months after making the cryptocurrency legal tender in the country. The new city would run completely on Bitcoin and be exempt from all taxation except value-added tax.

The country’s National Bitcoin Commission Office was eager to make the connection between the revival of the port and the Bitcoin City project. “Big money is ATTRACTED to BITCOIN COUNTRY,” Max Keiser, senior Bitcoin adviser to Bukele, tweeted. Bitcoin Office director Stacy Herbert also noted:

“President Bukele has rescued so much that had [been] abandoned in El Salvador.” 

Bitcoin City financing has to come from somewhere

Bitcoin City was originally intended to be financed by a $1-billion Bitcoin bond. That bond was also known as the Volcano Bond due to plans to generate the energy to mine the Bitcoin to back it using geothermal power from extinct volcanoes. Blockstream and Tether-linked iFinex were slated to provide technical support for it. Blockstream chief strategy officer Samson Mow left that company and formed JAN3, which pledged to help create El Salvador’s Bitcoin City.

The Volcano Bond made it through the legislative and regulatory hurdles in December but missed its expected first-quarter launch. Now, the Yilport-CEPA project should see dredging and the purchase of heavy equipment at La Unión by the end of the year.