JAKARTA - A group or group called Volcano Energy announced on Monday 5 June that it would invest $1 billion to create one of the world's largest Bitcoin mining companies. This investment is carried out in a public-private partnership in El Salvador.
The project will begin with an initial USD 250 million (IDR 3.7 trillion) fund, backed by "main Bitcoin industry leaders" in collaboration with renewable energy developers, Volcano Energy said in a statement.
The El Salvador government's "Bitcoin" office continues this news via its Twitter. The presidential office did not immediately respond to a request for comment.
Volcano Energy said the funds would be used to build a power generation park with a capacity of 241 MW using solar and wind energy at the northwestern municipality of Metapan, which would eventually supply power for Bitcoin mining.
Bitcoin mining uses a high-power computer connected to the global network, and in the process consumes a large amount of electricity. This intense energy-needing practice has been criticized by environmental activists who fear it will exacerbate forest losses and climate change.
The announcement comes two years after El Salvador's President, Nayib Bukele, expressed his intention to make Bitcoin a legal tender in the country.
The Reuters report shows Bitcoin adoption among El Salvadorans is still unstable, while the International Monetary Fund has warned of its acceptance due to legal risks, fiscal fragility, and speculative market properties.
Bukele and its Bitcoin proponents have said that the currency can bring jobs, financial inclusion, and foreign investment into the country, which is one of the poorest countries in the Western Hemisphere.
The government of El Salvador will have "priority participations equivalent to 23% of revenue" in the project, Volcano Energy said, with private investors having 27%.
The rest, as much as 50%, will be reinvested into infrastructure, the statement said, without explaining the overall ownership structure.
Tether, a startup operating a cryptocurrency tied to the US dollar, participated in this initial investment, was confirmed in a separate statement without specifying the amount of its contribution.
Josue Lopez, who was involved in the $200 million solar energy plant project announced last year, is said to be CEO of Volcano Energy, and Max Keiser, a Bitcoin influence, as chairman.
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