Honduras’ Roatan Island Special Economic Zone Recognizes Bitcoin as Unit of Account
The special economic zone (SEZ) on Honduras’ Roatan Island, known as Próspera ZEDE, has officially acknowledged Bitcoin (BTC) as a unit of account for various financial transactions. This recognition means that Bitcoin can now be used for commercial, tax, and financial purposes within the SEZ. According to Jorge Colindres, the technical secretary and tax commissioner of the SEZ, this decision provides individuals with more financial and monetary freedom by allowing them to carry out transactions and report taxes in the currency of their choice. Entities interested in adopting Bitcoin as a unit of account must file a notice with the Tax Commissioner and reference an approved major cryptocurrency exchange. The deadline to apply for BTC as a unit of account for the 2024 tax year is January 30.
Temporary Limitations on BTC Tax Payments
Due to technical limitations of the e-government system and external regulatory issues, there are temporary limitations on the “Final BTC Tax Payment Procedure.” Entities that choose Bitcoin will need to determine their tax obligations in reference to BTC for internal accounting purposes. However, they must report these obligations in US dollars or the local currency, Lempira, to Próspera ZEDE until the procedure is implemented. Once the issues are resolved, entities will be able to report their tax obligations in Bitcoin.
Próspera ZEDE’s Adoption of Bitcoin
Próspera ZEDE, located on Honduras’ Roatan Island, adopted Bitcoin as a legal tender in 2022. The SEZ also allows municipalities, local governments, and international firms to issue Bitcoin bonds within its jurisdiction. However, following this announcement, the Central Bank of Honduras stated that it cannot guarantee cryptocurrency transactions. Honduras follows in the footsteps of its neighboring country, El Salvador, which became the first country to adopt BTC as legal tender in September 2021.
Hot Take: Honduras SEZ Embraces Bitcoin for Financial Freedom
Honduras’ Roatan Island special economic zone, Próspera ZEDE, has taken a significant step towards financial freedom by recognizing Bitcoin as a unit of account for various financial transactions. This recognition allows individuals and entities within the SEZ to use Bitcoin for commercial, tax, and financial purposes. By providing more financial and monetary freedom, this decision empowers people to transact and report taxes in their currency of choice. While there are temporary limitations on BTC tax payments due to technical and regulatory issues, entities can still determine their tax obligations in reference to Bitcoin for internal accounting purposes. This move follows the adoption of Bitcoin as legal tender by neighboring country El Salvador, solidifying the growing acceptance and use of cryptocurrencies in Central America.
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