Honduras’ Próspera Zone, a special economic region on Roatan Island, has taken a bold step in the world of finance by officially recognizing Bitcoin as a unit of account. This move by Prospera Honduras aims to enhance financial freedom for individuals and businesses operating within this zone.
Prospera Honduras: BTC as Unit of Account
Less than two years after accepting Bitcoin as legal tender, Próspera Zone has announced its commitment to financial innovation by adopting Bitcoin as a unit of account. This means that Bitcoin can now be used to measure the market value of goods and services within the zone.
Jorge Colindres, the acting manager and tax commissioner of Próspera Zone for Employment and Economic Development (ZEDE), spearheaded this initiative. He emphasized the belief in financial and monetary freedom, asserting that people should have the right to conduct transactions, manage accounting, and report taxes in their chosen currency.
He stated:
“At @ProsperaZEDE we believe in the right to financial freedom and monetary freedom. People should be free to carry out transactions, do their accounting and report taxes in the currency of their free choice.”
Implementation Challenges and Solutions
Despite the progressive move, there are temporary limitations in implementing the “Final BTC Tax Payment Procedure.” Technological challenges with the eGovernance system and external regulatory obstacles are currently hindering its immediate implementation. However, entities opting for Bitcoin can calculate tax obligations using BTC internally, reporting them in either US dollars or the Honduras lempira to Próspera ZEDE.
The Honduran Central Bank on the other hand, has disclaimed support for “cryptocurrency transactions”, emphasizing individuals have sole responsibility when engaging in virtual asset transactions.
The Central Bank of Honduras stated earlier in 2022:
“Any transaction carried out with this type of virtual asset falls under the responsibility and risk of the person carrying it out”
Path to Full Adoption
To formally adopt BTC as their currency, businesses need to submit a request to Próspera’s tax committee, referencing an approved digital asset exchange such as Coinbase or Kraken within a specific timeframe.
Próspera ZEDE, established in May 2020, has been a significant player in driving economic growth. With over $100 million received in investments in its three-year tenure and the creation of more than 3,000 jobs across the country, it stands as a testament to Honduras’ commitment to embracing innovative financial solutions.
This move follows in the footsteps of neighboring El Salvador, which made history by adopting BTC as legal tender in 2021. Próspera ZEDE’s pioneering recognition of Bitcoin sets a precedent for other regions considering similar measures.
Conclusion
In the evolving landscape of digital currencies, Próspera’s recognition of Bitcoin as a unit of account showcases its commitment to progressive financial solutions. Despite temporary challenges, the zone’s determination to navigate these hurdles highlights its dedication to embracing the future of finance.
This step positions Próspera as a hub for financial innovation and demonstrates Honduras’ openness to integrating Bitcoin into its traditional financial system, setting a trend for other regions to follow suit.
