Island of Honduras Adopts Bitcoin as Legal Tender

  • The use of Bitcoin and other cryptocurrencies as legal tender was legalized on the island of Roatán, part of a special economic zone in the Central American country.
  • Honduran regulators have declared that they do not hold responsibility for crypto transactions.
  • Authorities in the economic zone are seeking to encourage crypto investments.

Roatán, a tourist island and city on the Caribbean coast of Honduras, declared a special economic zone, has adopted Bitcoin as a legal tender, according to information from officials in the area.

The special zone, called “Honduras Prospera,” includes some parts of the island of Roatán, where some 60,000 people reside, as well as the city of La Ceiba, located on the Atlantic coast of the Central American country.

“Honduras Prospera” was established in 2020 to attract national and foreign investments, so it enjoys administrative, fiscal and budgetary autonomy, as reported by Reuters.

"Prospera's flexible regulatory framework enables crypto innovation and the use of Bitcoin by residents, businesses, and governments," economic zone authorities said in a statement.

In addition to Bitcoin, residents of the island of Roatán and La Ceiba, as well as companies operating in the designated zone, will be able to use other cryptocurrencies for business activities.

Furthermore, local governments and international companies established within the economic zone have the power to issue Bitcoin bonds within the jurisdiction.

On The Flipside

  • Despite having installed crypto as legal tender, the Central Bank of Honduras has clarified that it will not be held responsible for transactions made using the asset class.
  • The issuer had previously disclosed their stance on the matter regarding when a query was made by the authorities of the special economic zone.

 

"Any transaction carried out with this type of virtual asset is the responsibility and risk of the person who carries it out," read the statement, issued in March.

Why You Should Care

  • “Honduras Prospera” join several jurisdictions in Latin America in legalizing the use of Bitcoin and other cryptocurrencies for commercial activities and the payment of taxes.
  • In addition to El Salvador declaring Bitcoin legal tender, and Cuba legalizing crypto, several Latin American cities are promoting the use of cryptocurrencies.

The municipalities of Rio de Janeiro in Brazil, La Molina in Peru, and El Zonte in El Salvador have been among the most enthusiastic, while in Buenos Aires, Bogotá, and Caracas, the use of cryptocurrencies has become a regular activity, registering strong growth in recent years.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

Author

Santiago is a Venezuelan blockchain reporter specializing in economic and financial issues, with special emphasis on stablecoin trading as well as political and regulatory issues related to Latin America. Every day he reviews and analyzes movements in the crypto market to offer readers first-hand information that can help them make sound decisions in the exciting world of crypto.