Bitcoin Is Now Accepted as a Legal Tender in Honduras’ Special Economic Zone
Prospera’s special economic zone is seeking to stimulate economic activity and attract international investment by using cryptocurrency.
Bitcoin and other cryptocurrencies may now be used as a means of payment for persons and companies in the Prospera special economic zone on the island of Roatan, according to a statement on Thursday.
The measure follows El Salvador’s example, which legalized bitcoin as legal cash on Sept. 7. El Salvador’s case, a first in the globe, has enraged US lawmakers and triggered House and Senate legislation to explore the possible threats to the world’s biggest economy.
Prospera, founded in 2020, is a privately run community in Honduras with its own legal, economic, and administrative systems. The territory is governed by the national government’s Zone for Employment and Economic Development statute, which aims to increase investment and job possibilities in the country’s mainly deserted interior.
“When paired with Prospera’s services, this new kind of foreign direct investment has the potential to turn destitute communities into thriving hubs of creativity and wealth,” a piece of the statement says.
Additionally, municipalities in Honduras are now permitted to issue bonds in bitcoin in order to attract international investment. The statement states that any businesses and local governments, with the exception of those registered in the United States, are allowed to apply.
Bonds are marketable debt securities used to raise funds in both the public and private markets. An issuer offers bonds to investors in order to raise or borrow money for certain projects. Investors are compensated with fixed-rate coupons that are normally paid quarterly, biannually, or yearly.
To guarantee regulatory compliance, both the sale of bonds and the ability to use bitcoin as legal money would be “underpinned by world-class AML and KYC requirements.”
President Nayib Bukele of El Salvador announced intentions in November to establish a “Bitcoin City” financed mostly by the issuance of bitcoin bonds with a 6.5 percent coupon rate for the first five years. The $1 billion collected will be divided between financing and construction of the city, with the remaining half used to acquire further bitcoin.
Bukele’s administration had planned to debut the bonds in March but had to postpone them owing to adverse market circumstances and the Ukraine crisis.