The Próspera Special Economic Zone in Honduras Officially Recognizes Bitcoin as a Payment Unit

Jorge Colindres, managing manager and tax commissioner Pr total ZEDE (photo: x @mencolindres)

JAKARTA -  Less than two years after adopting Bitcoin (BTC) as legal tender, Próspera, a special economic zone in Roatan, Honduras, officially recognizes Bitcoin as a payment unit. This means Bitcoin can now be used to measure the market value of goods and services.

The development was led by Jorge Colindres, executive manager and tax commissioner of Próspera ZEDE (Zone for Employment and Economic Development) on January 5.

In a January 7 post on X (formerly Twitter), Colindres said his motive was to provide more financial freedom to individuals and businesses operating in the area.

"At @ProsperaZEDE, we believe in the right to financial freedom and monetary freedom. People should be free to make transactions, do their accounting, and report taxes in the currency of their free choice," he tweeted.

This development means BTC can be used as a monetary unit to measure the market value of various goods and services in the Próspera zone.

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

However, Colindres said that they are currently unable to implement a “Final BTC Tax Payment Procedure” due to technological limitations with their eGovernance system as well as some external regulatory issues.

Meanwhile, the tax obligations of entities that elect Bitcoin will be determined by reference to BTC for internal accounting purposes but reported to Próspera ZEDE in United States dollars or Honduran lempiras.

"Once the issues are resolved, the entity will report the tax liability (and pay the appropriate amount) to Próspera ZEDE in BTC," Colindres said.

Those interested in using BTC as a payment unit must submit a notification to the Próspera tax commission within 30 days after the relevant tax period.

Próspera ZEDE launched in May 2020 on the northern island of Roatan. The region made BTC legal tender in April 2022 – about seven months after Honduras' neighbor El Salvador made the cryptocurrency legal tender across the country in September 2021.

Colindres recently described Próspera ZEDE as one of the "most competitive special regimes" in Latin America, which he said had received more than  100 million US dollars (IDR 1.5 trillion) in his three years in office and created more than 3,000 jobs across country.