Honduran City of Prospera Adopts Bitcoin as Unit of Account

Crypto

MARKET_WATCH

The city of Prospera in Honduras has recently adopted bitcoin as a unit of account, allowing companies to pay taxes and determine obligations in bitcoin. The measure could incentivize the development of a circular economy, given that bitcoin has been legal tender in the city since 2022.

Prospera Adopts Bitcoin as Unit of Account

The city of Propera has taken the first steps for the development of a pure bitcoin-based economy. The zone announced it approved using bitcoin as a unit of account on January 5, allowing for prices and taxes to be denominated and paid using bitcoin.

Jorge Colindres, General Secretary of Prospera, supported this decision. He stated:

At Prospera, we believe in the right to financial freedom and monetary freedom. People should be free to carry out transactions, do their accounting, and report taxes in the currency of their free choice.

Adopting BTC as a unit of account brings possibilities for establishing a bitcoin circular economy in the city, given that BTC has been approved as a legal tender since 2022. In this sense, the city declared that this move “presents an exciting opportunity for residents and businesses at Prospera, paving the way for a modern, efficient economic ecosystem in this pioneering city.”

However, the payment of taxes with BTC is still on hold due to external regulatory issues and technical limitations involving the adopted electronic tax payment system. This means that tax duties will be declared in BTC but will be reported to authorities in U.S. dollars or Honduran lempiras.

While at one time there were rumors about Honduras adopting bitcoin as legal tender in 2022, the central bank of the country quickly put the rumors to rest, stating that it was not a regulated currency and had no status of legal tender, later warning on the dangers of cryptocurrencies due to the rising popularity of these assets.

Nonetheless, Prospera has self-regulation faculties under the Development and Employment Zone (ZEDE) designation, allowing it to make independent decisions. This, however, has spurred criticism from part of the Honduran society that considers the existence of these zones a violation of its constitution and sovereignty over the territories they occupy.

Source : Bitcoin News by Sergio Goschenko / Jan 9, 2024

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