Ever since El Salvador made Bitcoin legal tender, many other countries have been contemplating the same move. Of course, it’s not easy just quitting the dollar, as it’s an established global currency many deal in. However, considering the latest global developments and the impending financial crisis, Bitcoin looks like a good alternative.
South American country Honduras has been thinking about it for a while. It didn’t pull the trigger on a widespread adoption of Bitcoin, but the special economic zone of Prospera pulled the trigger on it in an attempt to attract foreign investment and tourists.
Both Residents and Foreign Businesses Can Use BTC to Pay for Services and Taxes
Prospera is a special economic zone on the Island of Roatan in Honduras. Bitcoin and other cryptocurrencies are now legal to use in the SEZ as a form of payment for both businesses and individuals. The move sees Honduras follow its neighboring country El Salvador which has already made the switch from USD to Bitcoin. As a new form of direct foreign investment, it can reshape impoverished countries and turn them to modern centers of innovation.
Prospera was established in 2020 as a privately managed settlement in Honduras. It has its own political and judicial system with separate administrative and economic levels. The area is also subject to the government’s Zone for Employment and Economic Development law. This special economic zone’s goal is to try and boost investment opportunities, especially attract foreign investment.
With the decision to officially accept Bitcoin as legal tender, the SEZ will surely attract more attention. Honduras’ municipalities can now issue bonds in Bitcoin to entice foreign investment. It allows all foreign entities to apply, except for those registered in the USA. The US considers this move and El Salvador’s decision as controversial and is against them. On the other hand, issuing Bitcoin bonds is a perfectly legal instrument to raise capital in private and public markets, so the Honduras government doesn’t see what the issue is.
A Revolutionary Move
There’s no question that this could be a revolutionary move that ends up attracting a lot of foreign interest in the SEZ. Big tech companies are crazy about crypto, and a detached island with special economic privileges in Honduras sounds like something they’d love to invest in. With crypto in the mix, the SEZ becomes a truly attractive destination.
It’s becoming clear that South America is poised to become the Bitcoin heaven investors have always dreamed of. Fueled by high inflation and serious financial problems, countries in the region are looking at Bitcoin as an alternative, and it may prove a good one too. The experiment in the SEZ will be a real test. Prospera is a perfect breeding ground for crypto innovation, and foreign investments will surely help.
El Salvador isn’t staying behind. President Nayib Bukele has already announced plans to build a Bitcoin City in November funded by Bitcoin bonds. They’ll have a 6.5% interest rate for the first five years, with the amount raised for the project split into building the unique city and funding it.