ZoneBitcoin EditorialHonduras, a Central American country known for its economic and social challenges, recently made headlines thanks to a self-sustaining city project called prosper. The idea is to create a city conducive to crypto-holders who would seek to settle in a legal and tax framework adapted to cryptocurrencies.
This project, launched in collaboration with international partners, aims to transform the economic and social conditions of residents by providing a framework conducive to innovation, entrepreneurship and job creation.
Through Prospera, Honduras hopes to attract foreign investment, stimulate economic growth and improve the quality of life of its population. However, the project raises some criticism from residents and certain international organizations who see it as a loss of the country's sovereignty.
In this article, we will examine the origin and concept of the program, its goals and achievements so far, and the controversies and criticisms it faces.
Origin of the Prospera concept
Honduras has long faced problems such as poverty, insecurity, unemployment and corruption, which have hampered its economic and social development. However, with the Prospera project, the country seeks to push back against these obstacles by creating special economic zones.
The Prospera program is part more generally of what we call zones for employment and economic development (ZEDE) or simply special economic zone (SEZ). These are geographic regions in which economic laws are more liberal and more advantageous for businesses than those practiced in the rest of the country.
The idea of ZEDE was formulated by the economist Paul Romer, by the Nobel Prize winner, who argued that developing areas plagued by poor governance could improve an entire economy.
Thus, ZEDEs offer benefits such as exemption from import and export taxes, as well as the possibility of establishing internal governance systems, courts, security forces, schools and even regimes of social Security. We must imagine a perfectly autonomous city within a given state.
The Prospera program is the first project to gain approval from the Honduran government to begin a city operating on a private political charter, in accordance with this legal framework.
Thus, in Honduras, Prospera's objective is to create an environment conducive to economic development and innovation, by establishing its own laws and offering attractive tax incentives.
Objectives and achievements of the Prospera program
The Prospera program has its roots in the concept of autonomous cities created in recent years, inspired by cities such as Hong Kong, Singapore and Dubai. While there were 79 autonomous city projects in 1975, today there are more than 5000 in the world. The notoriety and success of each autonomous city must be considered for each case. The name "Prospera" comes from the fact that these cities are considered "prosperous" economies.
The Prospera program aims to stimulate economic development in Honduras by attracting foreign investors and promoting job creation. Prospera focuses on the crypto industry seeking to become a hub in the country and globally. By offering a favorable legal and regulatory framework, Prospera hopes to attract businesses, entrepreneurs, blockchain developers and bitcoiners from all over the world.
It should be noted that the program also emphasizes the empowerment of women by promoting gender equality, access to employment and female entrepreneurship.
A pilot project on the island of Roatan
Since its inception, the Prospera program has had mixed success. It was primarily in the autonomous city on the island of Roatán that Prospera developed the first "pilot project."
With its airy offices, open-air common areas with ocean views and modern infrastructure, Próspera is already attracting the attention of investors and potential residents. The program has also attracted interest from the international community, with local and regional partners actively supporting its development.
Controversies and criticisms
In the article published by theRestofWorld organization, various incidents are reported such as the one which prevented the neighboring village from Crawfish Rock to have access to running water for weeks. After repairing the distribution circuit, the Prospera company sent invoices to residents. However, the repairs were carried out by the Prospera Foundation which defines itself as a non-profit organization. After this first notable incident, residents fear that other repercussions and other new bills for basic services will become a norm...
The local community is then always more suspicious of those who International organisations and newspapers such as The Guardian calls them "crypto-colonialists".
Some ideological opponents and established interests have criticized the ZEDEs and questioned their legitimacy and impact on national sovereignty. Accusations of land dispossession and expropriation have been leveled against ZEDEs, fueled by actors seeking to protect their positions of power or whose ideological alignment is incompatible with the concept.
According to some voices, the Prospera program would only make the project's investors prosperous and allow the country's companies to avoid taxes, which would have the effect of weakening the local economy. Thus, the most vulnerable local population would suffer the repercussions of this liberal policy. The Prospera program counts among its backers Pronomos Capital, a venture capital fund led by Patri Friedman, and financed, among others, by Start-up Valley entrepreneurs such as Peter Thiel. This shows the liberal but also financial dimension of the project, which could neglect its social impact on the inhabitants of the island.
Otherwise, as the saying goes, "the road to hell is paved with good intentions" and this "crypto libertarian paradise" could become a real hell for the inhabitants if it is not thought of in fair terms for the local populations.
The promoters of the program including Erik Brimer, the founder of Prospera refuted these accusations, saying that the projects are carried out in a transparent manner, paying particular attention to respecting the land rights of local communities.
It should also be noted that this is still a pilot project and that we do not yet have conclusive figures to estimate the socio-economic impacts of the project.
Is the Prospera program a bitcoin village?
Although Prospera and the Bitcoin villages as " The Zonte » in El Salvador share similarities as innovative models of economic and social development, they also present significant differences.
In terms of philosophy and objectives, the Prospera project focuses on the overall economic and social development of a specific area, by attracting foreign investment, creating jobs, improving infrastructure and promoting innovation and entrepreneurship. Its goal is to stimulate economic growth and improve the quality of life of the people of Honduras.
Bitcoin Villages, on the other hand, focus on the adoption and use of the Bitcoin cryptocurrency as a means of exchange and local economic development. Their main goal is to promote the use of bitcoin and facilitate transactions in these communities.
Another difference is the regulatory and legal framework: Prospera is a project supported by the government of Honduras and benefits from a specific regulatory framework. It operates as a special economic zone, with regulations and tax incentives tailored to encourage foreign investors who want to e.g. a second passport.
Bitcoin villages, on the other hand, are not backed by a specific government or regulated in the same way. They are often self-sustaining community initiatives that seek to create a bitcoin-based ecosystem. That said, there is certainly an exception for "El Zonte" in El Salvador which is part of a development policy initiated by President Bukele.
Finally, another distinction consists of the scope and size of these different autonomous villages. Prospera aims to develop special economic zones of significant size as part of a national project. It seeks to attract large-scale investment and have a country-wide impact.
In contrast, Bitcoin villages are generally smaller projects, often focused on a specific community or region. They tend to be more experimental and focus on local applications of blockchain technology and cryptocurrencies.
In summary, Prospera and Bitcoin villages are innovative economic development models, but with different objectives, approaches and scopes. Prospera focuses on the creation of special economic zones and overall economic development, while Bitcoin Villages emphasize the use of blockchain technology and bitcoin within local communities.
However, Prospera has a very strong "bitcoin" dimension to its project, as evidenced by the support for the local academy " AmityAge » which is the only organization in Honduras that trains the local population in Bitcoin.
Future Outlook
Despite challenges and controversies, the Prospera program continues to move forward. Developers and investors are optimistic about the economic opportunities and innovation it can offer Honduras. Ongoing projects, such as Próspera on the island of Roatán and the project Orquidea, an agro-industrial park near the town of Choluteca, demonstrate Prospera’s determination to establish itself sustainably in the country.
Despite controversies and criticism, Prospera remains committed to its mission of creating an environment conducive to economic prosperity and the empowerment of local communities.
However, it is important to strike a balance between economic development and the protection of land rights and national sovereignty. It is imperative that the local population benefits just as much as the new community of crypto holders moving into the country. By promoting transparency, community participation and respect for international standards, Prospera can become (and we hope) a model of success for other economic development initiatives around the world.
See also:
- More and more “Bitcoin villages” are being created all over the world
- Bitcoin Beach: How “El Zonte” became a model for the rest of the world
- Bitcoin Ekasi: A circular economy like Bitcoin Beach in El Salvador
- Satoshi Island: A paradise island for crypto enthusiasts 🏝️
- Puerto Rico: the Caribbean island attracts more and more bitcoiners
