Honduran officials announced on April 8 that the country will now accept Bitcoin (BTC) as legal tender, but only in the special economic zone called Honduras Prospera.

As CryptoSlate reported in late March, the Central American country of Honduras had signaled its intention to adopt Bitcoin as legal tender. At that time, the president Xiomara Castro said that neighboring El Salvador cannot be the only country to free itself from the hegemony of the dollar.

The announcement is a victory for cryptocurrency adoption. However, it remains to be seen whether Honduras will extend the law beyond its special economic zone to the rest of the country.

What is Prosperous Honduras?

Honduras Prospera was established in 2020 as an economic development center to attract investment and business opportunities.

Located on the island of Roatán, about 65 kilometers off the north coast of Honduras, it boasts a tropical climate and a thriving infrastructure with plans to turn the area into a futuristic business paradise.

“This center enables a new model of economic development that is locally sustainable and globally integrated in one of the most beautiful islands in the Caribbean. Roatán Próspera offers new growth opportunities in Honduras to companies and individuals”.

Source: prospera.hn

Roatán is the first of many planned development centers in Honduras to follow the Prospera model. Such projects may drive the adoption of Bitcoin as legal tender in Honduras as new development begins.

The Central Bank of Honduras is cautious with Bitcoin

By adopting Bitcoin as legal tender, Honduran Prospera officials said that the fiscal and administrative autonomy of the zone “allows crypto-innovation” and allows the use of Bitcoin by all entities established there.

“Prospera’s flexible regulatory framework enables crypto innovation and the use of Bitcoin by residents, businesses and governments.”

However, the elephant in the room is that Honduras Prospera is a geographically small area within Honduras and not the country itself. Established in 2020, Roatán is still in the early stages of development and has yet to build the first residential units.

A statement from the Central Bank of Honduras points to friction within the country’s chain of command. As a result, the central bank says it cannot support cryptocurrency, and activity of this kind is the sole responsibility of the individual.

“Any transaction carried out with this type of virtual assets is the responsibility and risk of the person who carries it out.”

Still, what is happening with Honduras Prospera represents a broader bullish trend that has to do with the global adoption of cryptocurrencies.

The most recent data from Chainalysis shows that global adoption has grown 881% over the year to Q2 2021. Much of this growth is coming from emerging markets as locals turn to cryptocurrencies to combat currency devaluation. currency and access cheaper and frictionless remittance services.

Posted in: Bitcoin, Adoption

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This post Honduras adopts Bitcoin as legal tender, but there is a catch

was published first on https://cryptoslate.com/honduras-adopts-bitcoin-as-legal-tender-but-theres-a-catch/

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