Próspera island adopts Bitcoin as legal tender

Honduras’ island of Próspera, one of the most tourist-centric jurisdictions on the Island of Roatan, has declared Bitcoin legal tender. The island, which operates as a Special Economic Zone, also confirmed this at the Bitcoin 2022 conference in Miami.

In an announcement on Thursday, Próspera said that Bitcoin had, along with other cryptocurrencies, officially been recognised as legal tender. The use of these digital assets as legal tender will apply within the island’s jurisdiction, the statement added.

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The move mirrors Prospera’s “flexible regulatory framework” the special economic zone added. It now means that residents and businesses within the boundaries of the special zone can legally use or accept Bitcoin for payments.

No capital gains tax

The Próspera administration promises even more good news to residents and potential investors:  

Unlike most other jurisdictions, transactions in Bitcoin and other cryptocurrencies are not subject to capital gains taxes. Próspera also accepts payment of taxes and fees using Bitcoin.”

It added that anyone looking to start a Bitcoin or bitcoin-related business in the SEZ is free to do so. The businesses will work within the provider’s preferred regulatory framework, but with adherence to anti-money laundering (AML) and Know Your Customer (KYC) checks.

The island is also looking to make it possible for the issuance of Bitcoin bonds, similar to what El Salvador did following its historic adoption of Bitcoin as legal tender. More is likely to come to light going forward, but this adds to the increasing adoption across smaller independent jurisdictions.

For Próspera, its special zone tag comes with autonomy in terms of administration and fiscal control, the reason the bitcoin move contrasts with the government of Honduras.

Honduras recently dismissed claims it was about to follow El Salvador as the second nation-state to adopt Bitcoin as legal tender.