- Honduras’ Prospera Zone officially recognizes Bitcoin as a unit of account, expanding financial freedom.
- Interim Manager Jorge Colindres leads the initiative, emphasizing the right to financial flexibility.
- Despite the temporary restrictions, businesses that choose Bitcoin will be able to calculate their tax liabilities internally.
In a significant development, the Prospera Special Economic Zone (SEZ) in Roatan, Honduras, has officially recognized Bitcoin (BTC) as a unit of account, further solidifying its commitment to financial innovation.
The move comes less than two years after the region adopted Bitcoin as a legal tender, demonstrating its progressive stance toward integrating cryptocurrencies into traditional financial systems.
Aiming for economic freedom
Jorge Colindres, Acting Manager and Tax Commissioner of the Prospera Zone for Employment and Economic Development (ZEDE), led the initiative, which aims to provide greater financial flexibility to residents and businesses operating within SEZs. Colindres emphasized his belief in the right to financial and financial freedom, arguing in his January 7 announcement to I did.
in @ProsperaZEDE We believe in financial freedom and the right to financial freedom. People should be free to conduct transactions, do accounting, and file taxes in the currency of their choice. #Honduras #BTC https://t.co/nlaFLtheRL
— Jorge Colindres (@GeorgeColindres) January 7, 2024
The decision was well-received for its potential to improve financial freedom, but Colindres acknowledged certain temporary limitations. Currently, the ‘BTC tax payment final procedure’ is on hold due to technical problems in the electronic governance system and external regulatory obstacles. Nonetheless, businesses that choose Bitcoin will use BTC internally to calculate their tax obligations and report this to Prospera ZEDE in US dollars or Honduran lempiras.
Colindres expressed confidence that once these issues are resolved, businesses will be able to report and settle their taxes directly in BTC on Prospera ZEDE.
Businesses interested in adopting Bitcoin as their primary currency must submit a formal request to Prospera’s Tax Committee within 30 days of the relevant tax period. This request must mention an approved cryptocurrency exchange, such as Coinbase or Kraken, and highlight the SEZ’s efforts to ensure compliance and legality during the adoption process.
Prospera ZEDE area on Roatan Island
Launched on the northern island of Roatan in May 2020, Prospera ZEDE is establishing itself as one of the most competitive special regimes in Latin America. Prospera, which received more than $100 million during its three-year term and created more than 3,000 jobs nationwide, demonstrates Honduras’ commitment to embracing innovative financial solutions.
The move follows Honduras’ neighboring country El Salvador, which made history by adopting BTC as its fiat currency in 2021. Prospera ZEDE is a pioneer in recognizing Bitcoin as a unit of account, setting a precedent for other regions considering something similar. This is a move to accommodate the ever-evolving digital currency environment.