Honduras Economic Zone Integrates Crypto Into Financial System

In a remarkable development, Próspera, a special economic zone located in Roatan, Honduras, has embraced Bitcoin as a unit of account, solidifying its status as legal tender within the region. This significant milestone occurred in less than two years since Próspera first integrated the crypto into its economic framework.

By officially recognizing Bitcoin as a unit of account, Próspera has taken a groundbreaking step, allowing the cryptocurrency to serve as a legitimate measure for determining the market value of various goods and services within its jurisdiction.

Legitimizing Bitcoin In Honduras’ Economic System

Revealed on January 5 by Jorge Colindres, who currently serves as the acting manager and tax commissioner of the zone, this announcement signifies a significant stride toward legitimizing Bitcoin for an array of commercial, tax, and financial transactions.

The decision made by Próspera underscores a forward-thinking approach to incorporating cryptocurrency into various aspects of economic activities, reflecting the recognition of its utility beyond a mere store of value.

Colindres, in a January 7th post on the rebranded X platform, cited financial freedom for residents and businesses as the driving force behind the decision.

En @ProsperaZEDE creemos en el derecho a la libertad financiera y la libertad monetaria. Las personas deben ser libres de realizar transacciones, llevar su contabilidad y reportar impuestos en la moneda de su libre elección. #Honduras #BTC https://t.co/nlaFLtheRL

— Jorge Colindres (@GeorgeColindres) January 7, 2024

The adoption of Bitcoin as a unit of account allows for the valuation of goods and services within the Próspera zone in terms of BTC.

Colindres indicated that the implementation of the “Final BTC Tax Payment Procedure” is currently on hold due to technological constraints within the eGovernance system and unresolved regulatory matters.

Prior to the operationalization of the Final BTC Tax Payment Procedure, Bitcoin-selecting entities will conduct internal tax calculations in BTC, ultimately submitting reports to Próspera ZEDE denominated in USD or Lempira.

BTCUSD currently trading at $44,035. Chart: TradingView.com

The operationalization of the Final BTC Tax Payment Procedure will mark the commencement of both BTC-denominated reporting and payment of tax liabilities.

Próspera ZEDE will additionally offer pre-approved templates for declaring Bitcoin adoption and will undertake necessary updates to the eProspera platform to accommodate data entry and filing functionalities.

Notably, the economic zone’s resolution followed widespread speculations suggesting that Honduras was on the brink of endorsing Bitcoin as an official medium of exchange.

Pervasive rumors hinted at the possibility of the country emulating El Salvador’s move to legitimize Bitcoin, sparking anticipation and discussions about the potential adoption of the cryptocurrency within Honduras.

Bitcoin gets integrated into Honduras' economic system. Image: Freepik

Próspera As An Investment Hub

Colindres extolled Próspera as a beacon of “competitiveness” in Latin America, highlighting its three-year haul of over $100 million in investment and job creation exceeding 3,000.

Emerging on the scene in May 2020, Próspera ZEDE cemented Bitcoin’s legal tender status in April 2022, trailing El Salvador’s national foray by seven months.

Despite speculation, the Central Bank of Honduras poured cold water on rumors of wider Bitcoin adoption in 2022, urging caution when using such cryptocurrencies for transactions due to their unregulated status.

Featured image from Shutterstock