Economists Rally Behind Honduras in $10.8 Billion Legal Fight Over Crypto Island Project

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Bitcoin-friendly Próspera hits back at controversy in The Guardian

July 7, 2022 Coin Telegraph

Bitcoin City

Some residents have reportedly told the crypto-friendly city of Próspera to “go home” following the Honduran government’s repeal of the ZEDE legislation which enabled it.

The leadership of the crypto-friendly charter city of Próspera in Honduras has hit back at reports it is facing a backlash from residents of the neighboring community of Crawfish Rock over its expansion plans.

A July 5 article from The Guardian reported the special economic zone, touted as an island paradise with low taxes/fiscal responsibility, luxury homes and crypto-friendly regulation has seen pushback from some residents of the Crawfish Rock community.

Some residents are reportedly concerned about being displaced from their homes due to Próspera’s potential expansion plans, with the article describing the project’s headquarters as sitting “amid a landscape scarred by a bulldozer and deep holes dug for the foundation of the next phase of construction.”

It’s another salvo against the Bitcoin-loving city, which has been battling with the Honduras government after it repealed a Zones for Employment and Economic Development (ZEDEs) legislation in April, which was a key piece of legislation that would allow it to operate as a self-governed fully autonomous zone.

A lengthy Twitter thread from Próspera and article by general counsel Nick Dranias on July 6 however, claimed that articles such as the one from The Guardian as just another example of a “barrage of lies and misinformation from the mainstream media.”

“Unsurprisingly, given the impactful nature of our project, we have been confronted with a barrage of lies and misinformation from the mainstream media.”

Drani outlines three key myths allegedly being disseminated by mainstream media including:

“Myth #1: The Próspera team did not adequately socialize the project prior to launch.

Myth #2: Próspera is an ideological/crypto/libertarian project.

Myth #3: In Honduras, the Próspera ZEDE expropriated land from locals.”

Learn the truth about Prospera ZEDE & unplug from the propaganda. https://t.co/juiRMHgBum @usembassyhn @GobiernoHN @ProsperaGlobal @SenTedCruz @chiproytx @marcorubio @RyanBergPhD @exjon @RepMarkGreen @SenatorRisch @kyrstensinema @timkaine @USDOJ_Intl @USSOCOM @VP @SenBillCassidy
— Nick Dranias (@NickDranias) July 6, 2022

A Próspera representative told Cointelegraph that in general, the community response has been positive bar a select few:

“We have a fantastic relationship with the local community, are the largest employer of the community, and generally work well with them. In fact, only two members of the community dislike us — the media just always speaks to only those two individuals.”

Próspera Global also claims on Twitter that the supposed bulldozer scraped lands are construction sites for environmentally friendly “low-cost housing available to any islanders,” with the building jobs serving as a source of employment for the local community.

8/Next, Jeff alludes to "disputes over land rights'' & "displacing local residents." Can Jeff name 1 resident we have displaced? Of course not; the statement is false & misleading. pic.twitter.com/OLvy44u6lB
— Prospera Global (@ProsperaGlobal) July 5, 2022

Próspera has been locked in a legal standoff with the government since President Castro repealed the ZEDE law in April, which would give the project 12 months to register under a different framework such as a “Free Zone” which would offer tax cuts but not allow self governance.

At the start of June, Próspera submitted a request for government consultations under the Investment Chapter of the Dominican Republic–Central America–United States Free Trade Agreement (CAFTA-DR), in a bid to maintain its ZEDE status under the legal terms of the initial agreement.

Honduras Próspera Inc. has remained staunch that its registration as a ZEDE has a valid “legal stability” for at least another 50 years due to the legal framework of the agreement it signed with the government back in 2017. In a June 4 blog post, the firm noted that:

“A failure to uphold these commitments would constitute a breach of international and Honduran law, as well as wrongful and unfair treatment of Honduras Próspera. Moreover, it would send a message to the world that no foreign investment in Honduras is secure.”

The company stated it hopes to avoid an “international investor-state arbitration” and hopes that the government will act in “good faith” to the initial ZEDE agreement. The firm plans to “invest hundreds of millions of dollars more in the coming years,” and In April, Honduras Próspera Inc. raised $60 million to invest in the project despite the ZEDE repeal.

The representative added that the government is “yet to formally respond to our request for official consultation.”

Próspera is a privately-managed settlement in Honduras managed by Honduras Próspera Inc. The initial size of the Próspera Village is 58 acres and contains areas for its headquarters, housing, and areas for businesses to set up shop. Its size can grow over time if local landowners agree to integrate their properties into the ZEDE territory.

From beer to Bitcoin as legal tender: A BTC education in Roatán

April 21, 2022 Coin Telegraph

caribbean

How a small-scale Bitcoin education project involving a former brewery collided with plans for Bitcoin as de facto legal tender.

Few crypto enthusiasts around the world could point to the remote island of Roatán prior to the Bitcoin 2022 conference in Miami.

Dušan Matuska was one of them, a Bitcoin (BTC) educator whose plans to open a Bitcoin education center in a former brewery entangled with the Satoshi Nakamoto-inspired vision of a special economic zone in Honduras called Próspera. Located on Roatán, Próspera accepts Bitcoin as a de facto legal tender as of April 2022.

But how did a Slovakian Bitcoin miner stumble across one of the few locations worldwide to accept Bitcoin as de facto legal tender? And, what does a brewery have to do with it?

In late 2021, Matuska’s Bitcoin mining friends mentioned the Honduran isle of Roatan, explaining their intention to buy a few plots of land on the picture-perfect island. Given the success of neighboring country El Salvador and the Bitcoin Beach Bitcoin adoption story, as well as his personal mission to teach 100 million people about Bitcoin by 2030, Matuska’s curiosity was piqued.

Matuska flew over from Paraguay, where he was investigating renewable Bitcoin mining operations, and quickly learned Roatán is a “nice small island in Honduras” that has “beautiful views.” It’s like a “hidden pearl of the Caribbean.”

However, it’s small, so “after two weeks having a holiday there, you start to get bored.”

“Since our mission is always to educate people about Bitcoin, we began cooking up ideas about a Bitcoin education center in Honduras.”

In line with other Bitcoin grassroots projects around the world such as El Salvador and Portland, Oregon, while drawing from his own experience educating people about Bitcoin at crypto cafés in Eastern Europe, Matuska began scoping out centers for Bitcoin education.

*The Paralení Polis alternative education café in Prague, Czechia. The space became a Bitcoin education center. Source: Google*

A curious coincidence, Matuska is Slovakian — Czechs and Slovakians are close and share similar culture and histories — and Czech is the second-largest expat population on the island after the Americans. What’s more, an old Czech brewery had fallen into disarray.

The former Czech brewery appeared to be the ideal opportunity to rejuvenate a tired space and convert it into a place where visitors could learn about the world’s largest cryptocurrency. “It looked like a Bitcoin Citadel,” Matuska told Cointelegraph.

The beers to Bitcoin story had begun.

However, the size and scale of restoring a large and derelict brewery into an education center were daunting. When Matuska and the team “checked it out, the building was rotten and damaged.” Restoring the relic would cost “maybe hundreds of thousands of euros to put back to a normal state.”

In another happy accident, the Próspera business event was taking place on the island, just around the corner. Próspera is a special economic zone in the center of Roátan that hosts its own civil law and regulatory structure. Próspera’s laws take inspiration from the hugely successful Shenzen economic zone in China, as well as Dubai.

*The Próspera special economic zone. Source: Prospera.hn*

Matuska left the brewery to take part in the conference buoyed by conversations he had about Honduras potentially adopting Bitcoin as legal tender. He explained that in Roatán in early 2022:

“You could pay some taxes in Bitcoin; businesses were super open to accepting Bitcoin, or any other currency, because there is a huge amount of freedom in the whole area.”

During the conference, a golden opportunity presented itself: Matuska was asked to discuss his work with Bitcoin and education.

“I was thinking, okay, should I present the potential Honduras Bitcoin Education Center? Like, Is it okay or not? In the end, I decided I should.”

Shortly after the presentation about the brewery to Bitcoin project, Erick Brimen, founder and CEO of the Próspera special economic zone, turned to Matuska. “Come with me,” he said.

“Erick Brimen took me to a building at the highest viewpoint on Roatán in Pristine Bay. It’s an amazing building. Right now, there’s a school but it’s outgrown the building. In June, it’s going to be free. And. it’s going to be where we start building the center.”

Forget the derelict brewery, an even better Bitcoin education center had fallen into Matuska’s lap. Moreover, Matuska got the nod from the CEO of the organization that was the driving force for Bitcoin as legal tender in Próspera.

Visited Roatan island in Honduras last week to find a place for our future Bitcoin Education Center. We were offered this wonderful building in @Prosperahn to start in one of the most #Bitcoin friendly jurisdictions pic.twitter.com/6zrWpXAzJf
— Dusan Matuska (@dusan_matuska) April 11, 2022

Brimen explained to Cointelegraph that the Bitcoin education center in Próspera aligns with their key strategic objectives of identifying “100 cocreators that will be ‘hands on’ in activating a string of strategic projects.”

“Dusan’s project is one of them, he’s co-creating something important to the jurisdiction by installing a Bitcoin education center. Decentralized finance is key and Bitcoin is a much better form of currency than traditional fiat. We want to enable that.”

Upon seeing the new building and the scale of the project, Matuska’s brain went into overdrive. He needed to talk to his girlfriend, his colleagues, immigration authorities and airlines as they had just “a couple of weeks or months just to set it up and start to put everything together.”

Matuska told Cointelegraph that the Próspera project was keen to do “everything on Bitcoin.” A deal was struck just weeks before Bitcoin 2022.

During Samson Mow’s keynote speech at Bitcoin 2022, Bitcoin as a de facto legal tender was announced in Próspera, Honduras and Madeira, Portugal, while a Mexican senator shared ambitious Bitcoin plans for her country.

*The announcement made during Bitcoin 2022 in Miami. Source: YouTube*

Matuska jokes that Bremen almost mentioned the Bitcoin education center during the keynote speech, but the time constraints of just “90 seconds on stage” didn’t quite allow for it.

Back in Honduras, the Bitcoin education center is growing in importance as part of Próspera’s and Brimen’s vision for Bitcoin. Ultimately, Bitcoin should be understood and used correctly.

*The view from the top of the Bitcoin education center in Próspera. Source: Matuska*

Brimen told Cointelegraph that “it is not enough to simply make it legal,” as people should “have the tools available to them as well as the knowledge to use it optimally.” He continued:

“Since it is considered legal tender, we want to enable people to not just have the right to use it but to use it responsibly.”

As a result, Matuska is keen for Bitcoiners around the world to visit, reach out and be part of the change occurring in Honduras.

“Próspera actually asked us to be the leaders in terms of onboarding businesses in Honduras, helping them out and setting everything up. For us, it’s a huge leap toward our vision of accelerating Bitcoinization. And, that’s why I just couldn’t say no.”

“Lecturers from Czechia and Slovakia are flying out to teach,” but the team is still thin on the ground. As Brimen concludes, “to use Bitcoin to the maximum benefit possible,” they are going to need all the help they can get.

*The Próspera Bitcoin education center. Source: Matuska*

As for the former brewery that's fallen into disrepair, Matuska told Cointelegraph that "maybe" in the future, there will be a Bitcoin-related project taking place there. It'd be a shame to let such a beautiful building go to waste.

Crypto-Friendly Special Economic Zone in Honduras Adopts Bitcoin as Legal Tender

April 9, 2022 Bitcoin.com

Samson Mow introduces new nation-state adoption for crypto in Bitcoin 2022

April 7, 2022 Coin Telegraph

Bitcoin

Bitcoin is already legal tender in Roatán, Honduras and Madeira, Portugal. Now a Mexican Senator wants to make it so in her country as well.

Speaking at the Bitcoin 2022 conference in Miami, Samson Mow, former chief strategy officer of Blockstream, named three new jurisdictions that would be adopting or proposing to adopt Bitcoin (BTC) as legal tender. As told by Mow, the first is that of the Caribbean island Roatán, which is part of Honduras. Honduras Prospera Inc. is the organizer and promoter of the jurisdiction. The entity's president, Joel Bomgar, told the audience:

"Bitcoin within Prospera operates as legal tender. That means no capital gains tax on BTC, you can transact freely using BTC, and you can pay taxes and fees to the jurisdiction in BTC."

In addition, Bomgar announced that starting Thursday, the Prospera jurisdiction will enable municipalities in Honduras and corporate entities outside of the United States to float Bitcoin bonds within Prospera. Furthermore, accredited investors, meaning U.S. residents who qualify for a high-net-worth or income threshold, can also directly invest in Honduras Prospera Inc. and receive securitized equity tokens.

The next jurisdiction to make Bitcoin legal tender is that of Madeira, an autonomous region of Portugal. Miguel Albuquerque, president of the regional government of Madeira, said that "Individuals in Maderia are not subject to capital gains taxes when buying and selling Bitcoin," while also touting the region's 5% corporate tax rate in its free trade zone as one of the lowest in Europe.

Finally, Mexican Senator Indira Kempis floated the possibility of legislating Bitcoin as legal tender with the Mexican president, in-line with earlier claims, commenting:

"In Mexico, 67 million people are not included in our financial system. Bitcoin is the solution to this problem. Through financial inclusion and financial education, the people can have a better quality of life."

Central Bank of Honduras Discredits Bitcoin Legal Tender Speculation

March 25, 2022 Bitcoin.com

Honduras Will Not Adopt Bitcoin as Legal Tender

March 24, 2022 The Crypto Briefing

honduras