Technology

They create a zone where Bitcoin will be legal tender

By Claudia Contreras, E&N

It is the Employment and Economic Development Zone, Prosperous Honduras, which today announced the creation of a crypto-friendly jurisdiction where Bitcoin will function as legal tender, as it does in El Salvador, as well as the creation of the first Bitcoin Bonus, said the company in a statement.

Prosperous ZEDE, is a Special Development and Employment Zone, (ZEDE), which in Honduras is known as “model cities”, and is located in Roatan. Próspera ZEDE announced that municipalities, local governments and international firms will be able to issue Bitcoin Bonds from the jurisdiction of Próspera ZEDE, which at the same time promises to comply with all international anti-money laundering and know-your-customer standards. The project is similar to Bitcoin City that Salvadoran President Nayib Bukele intends to build in Conchagua, La Unión

Read more: Central Bank of Honduras insists: “Lempiras will continue to circulate”

The announcement comes at a time when the Government of Xiomara Castro has announced its intention, together with the National Congress, to repeal the decree creating the ZEDEs, which to date has allowed the installation of three of these zones in Honduras. Próspera is the area with the highest investment and job creation to date. In the session of February 1, a draft decree was introduced to the National Congress that in part contains the intention to repeal the decree that contains the Zede Law.

In the past, Próspera has said that the repeal of the law would affect the legal situation of investors, would violate the Free Trade Agreement with the United States and would give rise to international lawsuits for more than US$1.3 billion by investors. Prospera It has its own constitution and a 3,500-page legal code with frameworks for political representation and law-making.

Bitcoin bonuses starting today

The announcement of Próspera as a jurisdiction where the use of Bitcoin as a form of payment for both individuals and companies will be legal. “Unlike other jurisdictions, transactions in Bitcoin and other cryptocurrencies will not be subject to capital gains tax. Próspera will also accept tax and fee payments using Bitcoin and allow its residents to build cryptocurrency-focused businesses using a regulatory framework, all underpinning anti-money laundering and know-your-customer surveillance standards,” Próspera said today.

Bitcoin Bonds may be issued by municipalities in Honduras to attract foreign investors. Companies that are not from the United States, as well as other “types of political subdivisions of the world, can also issue Bitcoin Bonds through the Prospera regulatory framework. In all cases, the Bitcoin Bonds issued through Próspera will comply with all anti-money laundering and knowledge-of-customer surveillance standards.”

Prospera’s Bitcoin Bonds are ahead of those that El Salvador wanted to issue. The date of issuance of the so-called Salvadoran Volcano Bonds has not yet been confirmed by the Bukele government. In November 2021, Bukele announced the issuance of a US$1 billion state bond. Crypto investor Samson Mow explained El Salvador’s bond issuance mechanism: “There is Blockstream that works on the Liquid Network (an exchange settlement network that allows faster bitcoin transactions), and Bitfinex, one of the cryptocurrency exchange houses largest in the world, which will sell the bonds. These pieces will create the volcanic bonus.” According to Mow, the tokens (digital vouchers) of the bond will be issued on the Liquid Network, and then Bitfinex will allow investors to have access to a sales platform.

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