Technology
El Salvador to create one of the world's largest bitcoin mining farms
One of the investors for the project is Tether, a startup that launched the cryptocurrency USDT, which is pegged to the U.S. dollar
June 6, 2023 8:29am
Updated: June 6, 2023 8:29am
El Salvador plans to build one of the world’s largest bitcoin mining centers as part of a public-private partnership, announced the group called Volcano Energy on Monday.
The project will be backed by “key Bitcoin industry leaders” and renewable energy developers, the company said in a statement posted on Twitter. One of the investors for the project is Tether, a startup that launched the cryptocurrency USDT, which is pegged to the U.S. dollar, reported Coindesk.
Volcano Energy said an initial investment of $250 million would go towards developing a 241 megawatt (MW) bitcoin mine in the Metapan, in the northwestern region of Santa Ana. To generate enough computing power to mine, the site will be powered by 169 MW of solar energy and 72 MW of wind energy.
“Our primary goal is to position El Salvador as a prominent global player in the Bitcoin mining industry, while simultaneously promoting energy competitiveness, diversification, and geographic expansion for the Bitcoin network, as part of our unwavering commitment to establishing a global Bitcoin standard,” Volcano Energy said in the statement.
El Salvador’s government will play a role in the planning and execution of the site. Salvadoran President Nayib Bukele will receive “preferred participation equivalent to 23% of revenues,” while outside investors will own 27% of the venture, the group said. The remaining 50% will be “reinvested” to expand operations at the mine.
Wait is over! The power of @Volcano_Energy is here 🌋🔌#ElSalvador #BTC #Bitcoin #VolcanoEnergy pic.twitter.com/HTkd5ZOKfM
— Volcano Energy 🌋🔌 (@Volcano_Energy) June 5, 2023
El Salvador was the first country in the world to make bitcoin legal tender in September 2021. As of November 2022, El Salvador had purchased $1,381 bitcoin, valued at a price of around $55 million.
The move, however, has drawn criticism from international credit rating agencies, as it has lost over $60 million on its bitcoin experiment.
The International Monetary Fund (IMF), the World Bank, and JP Morgan, along with other financial and economic institutions, have warned that El Salvador is on an unsustainable path, given that the country is facing several multilateral and domestic debts.
