Over the years, several attempts have been made to create “crypto cities”—special zones designed to operate on blockchain technology—but most have failed, and crypto executives believe they know why.
One recent high-profile example was Akon City, the vision of Senegalese-American singer Akon. Announced in 2018 as a $6-billion smart city with a crypto-powered economy, the project was officially abandoned in July.
Another ambitious venture, Satoshi Island, launched in 2021 with plans to buy an entire island near Vanuatu and establish a blockchain-based community for crypto professionals. Its last update in July indicated the project was still working to set up essential services and finalize its licensing agreement with local stakeholders.
There were also ambitious plans in 2018 to create a blockchain-powered city called Puertopia at the Roosevelt Roads Naval Base in Ceiba, but the project has seen no significant updates in years.
Crypto cities are tackling the wrong problems
Speaking to Cointelegraph, Ari Redbord, global head of policy and government affairs at blockchain intelligence firm TRM Labs, said many crypto city initiatives fail because they pursue unrealistic goals.
“Many projects aim to build entirely new cities from scratch, with blockchain-based economies funded by tokens, operating completely independently from broader society,” Redbord explained.
He argued that a more viable approach is modernizing existing economies—using AI to analyze risk, detect fraud, and support smarter decision-making, while leveraging blockchain as a trust layer to ensure transparency and accountability.
“The idea of a crypto city is already happening,” Redbord said. “It’s about upgrading the systems we already rely on. As institutional adoption grows and governments provide clearer regulations, the world’s financial infrastructure is steadily moving on-chain.”
“Every city will become a crypto city, not through ideology but through technology — faster, safer, and more transparent rails for moving value.”
A fully crypto-powered city is possible—but highly challenging
Kadan Stadelmann, CTO of blockchain platform Komodo, told Cointelegraph that self-sovereign cities running on cryptographic and decentralized systems could theoretically exist in ungoverned spaces, such as international waters.
For such a city to succeed, blockchain would need to provide transparency, security, and adaptability across essential sectors like energy and food. It would also demand extreme dedication and a unified vision from residents, who might have to forego modern conveniences until the city is fully operational.
However, these cities would face significant risks, including interference from governments seeking to collect taxes or enforce laws, and vulnerability to attacks.
“Even if an individual buys an island, what are they to do if pirates show up? There’s no police or military, and no hospitals,” Stadelmann said. “A sovereign city amplifies these risks many times over.”
“It could be that crypto’s vast resources are best used to improve the world we’ve already got.”
A smarter approach: crypto zones within existing cities
Vladislav Ginzburg, founder and CEO of blockchain infrastructure platform OneSource, told Cointelegraph that integrating crypto initiatives into an existing city—like Dubai, with strong government support—offers a far more viable path than building a city from scratch.
“Some cities have already done an excellent job digitizing government services—Kyiv and Dubai come to mind—so that first key step is indeed possible,” he said.
Maja Vujinovic, co-founder and CEO of Ethereum treasury firm FG Nexus, echoed this view, noting that a standalone crypto city would face challenges with property law and governance.
“The realistic path isn’t a new sovereign city; it’s crypto-native neighborhoods within state-backed zones where licensing, AML, and immigration are already managed,” she said.
“The winning ingredients are: a government partner with delegated regulation and visas, multibillion-dollar staged capital, clear crypto rules, and anchor employers in AI, crypto and biotech.”
Sean Ren, co-founder of AI-native blockchain platform Sahara AI, argues that any crypto city attempting to operate outside government oversight is likely to fail.
Instead, he sees more potential in purpose-built zones within existing cities, designed for testing innovations like tokenized property rights or AI-driven data governance.
“The real opportunity isn’t in building walled gardens for tech elites,” Ren said, “but in creating regulatory sandboxes that generate insights to inform national policy.”
“A city designed to responsibly test AI training rules, data provenance standards, or token-based economies could add real value.”
