Honduras Prospera Adopts Bitcoin as Legal Tender, Madeira Waives Taxes

By I-HODL | A Crypto Journey | 8 Apr 2022


Guys, news coming out of the Bitcoin 2022 Conference in Miami, Florida this past week has certainly been exciting and, as is becoming the norm, more and more countries are promising to shake things up in the world of cryptocurrency. Let's get into it.

Bitcoin is now legal tender in Honduras' special economic zone

This week, Honduras announced that Bitcoin would be accepted as legal tender, albeit only within its special economic zone, Honduras Próspera. 

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Established in 2020, Honduras Próspera , is an economic development hub located on the Honduran island of Roatan in the Caribbean sea, some 65 kilometers off the northern coast of Honduras.  The island is touted as an ideal place for  investment and future economic growth, and given the zone's fiscal and administrative autonomy, it was deemed to be ideal for enabling crypto innovation and accommodating the use of Bitcoin by the entities established there.

The Legislation

In a statement issued on April 7th, Honduran officials announced that municipalities, local governments, and international firms could now issue Bitcoin Bonds within its jurisdiction with world class KYC and AML standards. This, they believe,  positions Próspera as one of the leading jurisdictions in the world for financial innovation and will help to create a new and accessible tool for attracting foreign direct investment and driving economic development in Honduras.

They note: " Unlike most other jurisdictions, transactions in Bitcoin and other cryptocurrencies are not subject to capital gains taxes. Próspera also accepts payment of taxes and fees using Bitcoin and enables residents to build crypto-focused businesses using an optimal regulatory framework of their choice, all undergirded by world-class AML and KYC standards to ensure worldwide regulatory compliance."

Though there were no immediate formal statements from the country's central bank in response to this statement, the central bankpreviously, in March, issued a statement indicating that it did not accept or back cryptocurrency and that persons investing or trading in the asset did so at their own risk.

Portugal's Madeira to Adopt Bitcoin

Próspera's revelation was not the only statement making waves at Bitcoin 2022. Portugal's autonomous region of Madeira has also announced plans to adopt Bitcoin, and on  April 7th, the Madeiran President Miguel Albuquerque made an appearance at Bitcoin 2022 where he reaffirmed his belief in Bitcoin and stated that soon Madeira’s residents would not need to pay personal income taxes when buying or selling Bitcoin.

What's Next?

There is some speculation in some circles that Mexico may follow next, guys, but I am not convinced that this will happen. There have been calls by Mexican politicians, most recently, Mexican senator Indira Kempis, representing the state of Nuevo Leon, who are pressing the country's president to adopt Bitcoin as legal tender. 

 

Guys, these latest developments follow on the heels of the bold steps taken by El Salvador's president Nayib Bukele in 2021 when he announced his country's plan to adopt Bitcoin as legal tender and then pushed through legislation which was adopted in September, cementing the move. El Salvador is now planning the launch of a Bitcoin bond later this year.

And so my friends, though these announcements are hardly Earth shattering, one cannot deny that they do represent a growing trend as Bitcoin and other cryptocurrencies gain footing in the world of mainstream finance particularly as it relates to smaller and developing economies. In the coming months, I suspect that other developing countries may introduce legislation and put more favorable systems in place to accommodate or regulate cryptocurrency transactions, and to facilitate crypto-related foreign direct investments in their economies. 

But what do you think of all these developments, my friends? On the call by Mexican politicians, do you think that Mexico is going to make a major announcement soon embracing cryptocurrency? Do you think that we will continue to see more favorable announcements by smaller countries and jurisdictions over time? In terms of Honduras, do you think that this latest move will soon extend beyond the special economic zone to the rest of the country? And do you think that facilitating Bitcoin transactions can attract foreign direct investment? I'd love to hear your thoughts, my friends, as we continue to occupy front row seats and observe shifts and changes in the world of digital finance.

Okay my friends, I'm off in search of another story. Until we meet again, please remember to be safe.

Arrivederci!

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I-HODL
I-HODL

Navigating the ebbs and flows of crypto trading, and writing about it.


A Crypto Journey
A Crypto Journey

There's nothing more exhilarating than navigating the ebbs and flows of crypto trading. I have sea legs today, but truth be told, I've been lost at sea more than I care to remember and I have weathered quite a few storms as a trader. But the crypto-verse has also rewarded my resilience, and so after every dip, I get right back to sailing in pursuit of me buried treasure. I love this digital evolution and am proud to be a part of it. These are the tales of a crypto adventure! 

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