Central America

El Salvador president plans ‘Bitcoin City’ financed by crypto bonds

AFP

President Nayib Bukele said El Salvador plans to build the world’s first “Bitcoin City”, powered by a volcano and financed by cryptocurrency bonds.

Bitcoin City “is gonna include everything: residential areas, commercial areas, services, museums, entertainment… airport, port, rail,” Bukele said at the Latin American Bitcoin and Blockchain Conference on Saturday.

El Salvador, which has used the US dollar for two decades, was the first country in the world to legalize bitcoin as legal tender.

Bukele said the Conchagua volcano “will power the whole city and will also power the mining.”

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Bitcoin mining is the process by which new bitcoin is created using computers that solve complex mathematical problems — a process which demands huge amounts of energy.

In El Salvador, some of that energy comes from a geothermal plant fed by the Tecapa volcano.

Bukele said the city would initially be powered by the Tecapa plant before his government builds a new geothermal plant powered by Conchagua.

“Zero Co2 emissions. This is a fully ecological city,” Bukele told the crowd.

To fund the project, El Salvador will issue $1 billion “bitcoin bonds” in 2022, according to Samson Mow, chief strategy officer of Blockstream, a blockchain tech provider.

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On stage with Bukele, Mow said half of “volcano bonds” would be invested in bitcoin, and the other half in infrastructure.

“El Salvador will be the financial center of the world,” Mow said.

Bukele said that Bitcoin City will only charge value added tax (VAT).

“We will have zero income tax. Zero percent forever. Zero capital gains tax… zero property tax, zero payroll tax,” he said.

No timeline was given for Bitcoin City’s construction.

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Central America

Guatemala narrows emergency measures to hardest-hit gang violence areas

The government of Guatemala has narrowed the scope of its state of emergency to the areas most affected by gang violence, Interior Minister Marco Antonio Villeda announced on Thursday.

The measure comes two months after coordinated attacks attributed to the Barrio 18 left 11 police officers dead.

President Bernardo Arévalo initially imposed a state of siege in mid-January following the violence, which was reportedly in retaliation for government intervention in three prisons where gang leaders had staged uprisings.

That measure, which allowed arrests without a warrant, expired after one month. It was then replaced by a less restrictive “state of prevention,” alongside an increased security deployment in Guatemala City and surrounding areas.

According to Villeda, the state of prevention has been extended for two additional weeks but will now apply primarily to the central department of Guatemala — home to the capital — and Escuintla, which have recorded the highest levels of homicides and criminal activity.

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“We need to continue these joint operations between the police and the military to maintain control,” the minister said.

The measure will also remain in effect in border departments including Petén, San Marcos and Huehuetenango, which border Mexico, as well as Izabal, which borders Honduras and Belize, in an effort to prevent the entry of criminal groups linked to drug trafficking.

Villeda added that in the past two weeks, homicides have dropped by 25% and extortion cases by 33% compared to the same period in 2025.

Central America

Costa Rica closes embassy in Cuba, citing human rights concerns

The government of Costa Rica announced on Wednesday the closure of its embassy in Cuba, a move that signals a further deterioration in diplomatic relations between the two nations.

Foreign Minister Arnoldo André confirmed that Costa Rica has also requested the withdrawal of Cuban diplomatic personnel from San José, leaving only consular representation in place.

According to André, the decision is driven by concerns over the worsening human rights situation on the island, including increased repression against citizens and opposition figures.

He also noted that Cuba’s ongoing economic and social crisis—marked by shortages of food, medicine, and basic services—has made the operation of the embassy increasingly difficult.

President Rodrigo Chaves backed the measure, stating that his administration does not recognize the legitimacy of Cuba’s political system.

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In response, the Cuban government rejected the decision, calling it a “unilateral” move taken under pressure from United States.

“Under pressure from the United States, Costa Rica has limited its relations with Cuba to consular matters,” Cuba’s Foreign Ministry said, describing the action as “arbitrary.”

Despite the diplomatic setback, Cuban authorities stated that historical ties between the two nations would endure.

Central America

Costa Rica closes Cuba embassy as president escalates rhetoric

The president of Costa Rica, Rodrigo Chaves, escalated political rhetoric on Wednesday, stating that “the hemisphere must be cleansed of communists,” following his government’s decision to close its embassy in Cuba.

The remarks come as Costa Rica moves to downgrade diplomatic relations with the island, citing a sustained deterioration in human rights. Chaves reiterated that his administration does not recognize the legitimacy of the Cuban government, accusing it of repression and of maintaining poor living conditions for its population.

“We do not recognize the legitimacy of that government. We will not maintain a consulate there; services will be handled from Panama,” Chaves said during a press conference.

The president also argued that the communist model has “failed” not only in Cuba but in every country where it has been implemented, emphasizing that freedom is essential for development.

The decision was made in coordination with president-elect Laura Fernández, who is set to take office on May 8 and is expected to maintain the same foreign policy stance.

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Foreign Minister Arnoldo André confirmed the closure of the embassy in Havana and requested that Cuba withdraw its diplomatic personnel from San José, while maintaining limited consular functions.

Costa Rican authorities justified the move by pointing to increased repression against citizens, activists, and opposition figures, as well as restrictions on fundamental freedoms.

The closure marks a new point of tension in bilateral relations and comes amid growing international pressure on Cuba.