Special Economic Zone in This Country Recognizes Bitcoin as a Unit of Account

Próspera, a designated special economic zone located on Honduras’ Roatan Island, has formally embraced Bitcoin as its official unit of account for assessing the value of goods and services.

The development was led by Jorge Colindres, who holds the position of acting manager and tax commissioner at Próspera ZEDE (Zone for Employment and Economic Development), and the announcement was made on January 5.

Bitcoin as a Unit of Account for Tax Purposes

In a post on January 7, shared on X, Colindres explained that the decision to adopt Bitcoin as a unit of account for valuing goods and services in Próspera aimed to provide greater financial freedom to individuals and businesses in the region.

He emphasized the belief in the right to financial and monetary freedom, advocating for the ability of people to conduct transactions, manage accounting, and report taxes in their currency of choice.

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 development allows Bitcoin to serve as a monetary unit for assessing the market value of various goods and services within the Próspera zone.

Colindres clarified that while the “Final BTC Tax Payment Procedure” cannot be implemented immediately due to technological constraints with the eGovernance system and external regulatory issues, tax liabilities of Bitcoin-electing entities will be determined in BTC for internal accounting purposes.

However, these entities will report and pay tax liabilities to Próspera ZEDE in either United States dollars or the Honduras lempira until the challenges are resolved.

Once the technical and regulatory hurdles are addressed, entities opting for Bitcoin as their unit of account will report tax liabilities and make corresponding payments to Próspera ZEDE in BTC.

Interested parties must file a notice with Próspera’s tax commission within 30 days of the relevant tax period, referencing an approved cryptocurrency exchange such as Coinbase or Kraken.

Bitcoin Adoption in Próspera

The decision by Próspera ZEDE comes amid previous speculations that Honduras might approve Bitcoin as legal tender, similar to the move made by El Salvador.

In 2022, the Central Bank of Honduras explicitly refuted these rumors, releasing a statement cautioning against the use of cryptocurrencies like Bitcoin in payment scenarios, emphasizing the lack of legal support for such transactions within the country.

Colindres, describing Próspera ZEDE as one of the “most competitive special regimes” in Latin America, noted that it has attracted over $100 million in its three-year existence and has generated more than 3,000 jobs across the country.