Honduras Economic Zone Adopts Bitcoin as Official Unit of Account

The special economic zone of Próspera in Roatan, Honduras, has officially recognized Bitcoin as a unit of account. Less than two years after adopting Bitcoin as legal tender, this development aims to enhance financial freedom for businesses and individuals within the region.

Jorge Colindres, the acting manager and tax commissioner of Próspera Zone for Employment and Economic Development (ZEDE), spearheaded this initiative, marking a significant step in the evolution of the region’s financial ecosystem.

This decision means that Bitcoin can now be used as a monetary unit to measure the market value of various goods and services within the Próspera zone. The move is aligned with the zone’s commitment to financial freedom, allowing individuals and businesses to conduct transactions and manage their finances in the currency of their choice.

While the adoption of Bitcoin as a unit of account is a progressive step, the implementation of the “Final BTC Tax Payment Procedure” faces temporary obstacles. Colindres cites technological limitations with the eGovernance system and external regulatory issues as the current challenges. As a result, tax liabilities for Bitcoin-electing entities will be determined in BTC for internal accounting but reported in US dollars or Honduran lempira until these issues are resolved.

Entities interested in using Bitcoin as their unit of account are required to file a notice with Próspera’s tax commission within 30 days of the relevant tax period. The notice should reference an approved cryptocurrency exchange, such as Coinbase or Kraken, adding a layer of legitimacy to the process.

Próspera ZEDE, launched in May 2020, has positioned itself as one of the “most competitive special regimes” in Latin America, attracting over $100 million in investments and creating more than 3,000 jobs in its three-year tenure, according to Colindres. This move to adopt Bitcoin as a unit of account further solidifies its commitment to fostering a modern and efficient economic ecosystem.

While rumors circulated about Honduras adopting Bitcoin as legal tender in 2022, the Central Bank clarified that Bitcoin held no regulated currency status. Próspera ZEDE’s independent decision-making capabilities, granted under the Development and Employment Zone designation, have enabled it to chart its course in the evolving landscape of digital currencies.