Honduras Economic Zone embraces Bitcoin for commerce
New guidelines in Honduras for Bitcoin use in financial operations.
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Recently, Próspera ZEDE, a special economic zone in Honduras established to create an attractive business environment through more flexible regulatory frameworks, tax incentives, and streamlined business processes, has officially adopted Bitcoin as a unit of account.
This decision aims to legitimize cryptocurrencies for various applications, including commercial activities, financial transactions, and tax matters.
The announcement, made on January 5 by Jorge Colindres, the acting manager and Tax Commissioner of Próspera ZEDE, sets forth the framework for legal entities to adopt Bitcoin. According to the new guidelines, entities looking to use Bitcoin for their financial operations must inform the Tax Commissioner within thirty days of the relevant tax period, referencing a significant cryptocurrency exchange like Kraken or Coinbase in their notice.
This policy allows legal entities registered under the Prospero Entity Registry Statute the freedom to use Bitcoin as their preferred monetary unit for accounting and value measurement.
Before the Final BTC Tax Payment Procedure rollout, Bitcoin-electing entities will calculate their tax obligations in Bitcoin for internal records but still need to report taxes owed to Próspera ZEDE using US dollars or the local Lempira currency.
Once Próspera ZEDE implements the Final BTC Tax Payment Procedure, these entities will directly report and pay their tax liabilities in Bitcoin. Próspera ZEDE will update the eProspera eGovernance platform and release approved Bitcoin election form templates through its General Service Provider to facilitate this transition.
This initiative follows other past endeavors made by Honduras related to Bitcoin. Despite rumors that the country may adopt Bitcoin as legal tender, mirroring El Salvador’s approach, the Central Bank of Honduras clarified in 2022 that Bitcoin had not been declared legal and warned about the risks associated with cryptocurrencies due to their lack of legal support when making payments.