El Salvador, which made history by being the first nation to accept Bitcoin as official money, now wants to spend $1 billion to set up a vast Bitcoin mining operation that uses green energy.
The project has the support of the Salvadoran government, which made Bitcoin legal tender in 2021. The state “Bitcoin Office” shared the news on its Twitter account.
Volcano Energy said it would use solar and wind energy to generate an estimated 241 MW of power in the northwestern municipality of Metapan. The mining operation boasts high-powered computers that facilitate processing transactions and ensuring network security.
The process of Bitcoin mining has been under scrutiny due to its high electricity consumption and impact on the environment. Critics have raised concerns over carbon emissions and their contribution towards climate change.
However, Volcano Energy aims to mitigate this by implementing clean energy sources that reduce environmental harm caused by Bitcoin mining activities.
According to Volcano Energy, the project will commence with an initial investment of $250 million and is expected to become one of the largest mining farms globally.
A Boost For El Salvador’s Economy
El Salvador is expected to experience economic benefits from a project that gives the government preferred participation equivalent to 23% of its revenues. Private investors will hold 27%, and the remaining 50% will be used for infrastructure development, according to Volcano Energy.
Volcano Energy’s CEO is Josue Lopez, who was also involved in a $200 million solar energy plant announced last year, reflecting his commitment to eco-friendly initiatives. Meanwhile, the Chairman of the Board, Max Keiser, is a prominent figure within the cryptocurrency community.
Volcano Energy said the project would create jobs, financial inclusion, and foreign investment for El Salvador. This is crucial for El Salvador’s economy. Moreover, the initiative will facilitate financial inclusion, a key goal for the nation.
Moreover, President Nayib Bukele has been a vocal advocate of Bitcoin. He believes it can reduce remittance costs, increase access to financial services and attract innovation.
However, adopting Bitcoin as a legal tender has faced challenges and criticism from some residents, international organizations, and experts. They have raised concerns about the cryptocurrency’s legal risks, fiscal implications, and volatility.
Furthermore, Tether is an investor in the project. The company operates a stablecoin pegged to the U.S. dollar. Tether confirmed its participation recently. However, they did not disclose their contribution.