Próspera ZEDE Incorporates Bitcoin as a Unit of Account

Last Updated on January 8, 2024 by SPN Editor

Bitcoin has been adopted as a unit of account in the Próspera ZEDE, a special economic zone in Roatan, Honduras. This allows the cryptocurrency to be used for valuing goods and services within the zone, marking a significant step towards the regional acceptance of digital currencies.

Próspera ZEDE, the special economic zone in Honduras, has made an official declaration recognizing Bitcoin (BTC) as a legitimate unit of account. This move is a significant acknowledgment of the cryptocurrency’s validity for various commercial, taxation, and financial purposes.

The zone’s acting manager and Tax Commissioner have outlined the terms under which legal entities can use Bitcoin as their unit of account. The zone also permits local governments, municipalities, and international companies to issue bitcoin bonds under its jurisdiction. This regulatory flexibility fosters crypto-innovation and encourages the use of Bitcoin by residents, businesses, and governments.

Jorge Colindres, acting manager and Tax Commissioner of the zone unveiled the announcement on January 5, outlining the specific conditions for legal entities to embrace Bitcoin as their unit of account.

“The Próspera ZEDE acknowledges the right of legal entities who are eResidents and organized or registered under the Prospero Entity Registry Statute to utilize Bitcoin (‘BTC’) as their designated unit of account. This pertains to the monetary unit or measure of value for maintaining their accounts and denoting values,” stated the announcement.

Entities aiming to adopt Bitcoin as their unit of account must submit a formal notice to the Tax Commissioner within thirty days of the relevant tax period. This notice should reference an approved major cryptocurrency exchange, such as Kraken or Coinbase.

Until the Final BTC Tax Payment Procedure is implemented, tax liabilities for entities selecting Bitcoin as their accounting unit will be calculated based on BTC for internal accounting but reported to Próspera ZEDE in United States dollars or the local currency, Lempira.

Following the implementation of the Final BTC Tax Payment Procedure, tax liabilities will be denoted in BTC, and entities will remit the corresponding amounts to Próspera ZEDE in Bitcoin.

The announcement also included an approved form for entities to formalize their Bitcoin election. Próspera ZEDE’s General Service Provider will publish templates of the BTC Election Notice form and update the eProspera eGovernance platform to facilitate corresponding data entry and filings.

This recognition by the economic zone comes in the wake of earlier speculations hinting that Honduras might consider approving Bitcoin as legal tender, akin to El Salvador’s move. Notably, in 2022, the Central Bank of Honduras refuted rumors suggesting that Bitcoin had been declared legal, cautioning against using cryptocurrencies like Bitcoin in payment transactions due to the absence of legal support for such dealings.

However, the Central Bank of Honduras has clarified that it does not guarantee cryptocurrency transactions. Any transactions involving these virtual assets are carried out at the risk and responsibility of the individuals involved.

Próspera ZEDE’s decision follows El Salvador’s move to adopt Bitcoin as legal tender in September of the previous year. The integration of Bitcoin into these regions signifies a major shift in the financial landscape, reflecting the increasing acceptance and incorporation of cryptocurrencies into traditional economic systems.

Future of Cryptocurrency in Próspera ZEDE

The adoption of Bitcoin by Próspera ZEDE marks a pivotal moment, reflecting an increasing trend toward embracing cryptocurrencies in the region. The forthcoming introduction of the BTC Tax Payment Procedure highlights the readiness of entities to incorporate Bitcoin comprehensively into their financial systems.

Próspera ZEDE possesses its own regulatory body that oversees the issuance of Bitcoin bonds. The zone is currency-agnostic, accepting any form of currency within its jurisdiction. For tax and fee payments, it accepts two traditional currencies (dollars and Honduran lempira) and five cryptocurrencies (Bitcoin, Ether, USDT, USDC, Dai).

As the zone expands its land holdings over time, its digital governance platform, ePróspera, will become increasingly significant. The revenue collected from taxes and other resident or business-related fees can be allocated towards land acquisition.

This strategic decision could have far-reaching effects on the acceptance of cryptocurrencies in specialized economic zones and could potentially inspire similar initiatives in other regions.