- Próspera Economic Zone on Roatán Island closed over a $480,000 tax dispute, escalating tensions with local authorities.
- Próspera’s management disputes the legality of the shutdown, asserting full compliance with Honduran laws.
In a striking move that reverberates through the cryptocurrency and economic development sectors, the Honduran government has intervened directly to close the gates of Próspera, a designated Economic and Employment Development Zone (ZEDE) located on the northern part of Roatán Island in the Caribbean. This action, initiated by Roatán’s mayor’s office on October 14, citing a significant unpaid tax bill amounting to 12 million Lempiras (approximately $480,000), has escalated a longstanding dispute between the zone’s operators and governmental authorities.
Legal and Financial Autonomy Under Scrutiny
Próspera, initially conceived as a blockchain-enabled autonomous region, was developed under the framework of the ZEDEs—zones intended to promote economic development through unique regulatory and financial freedoms. These zones are a part of Honduras’ broader strategy to attract investment and foster economic innovation, particularly in blockchain and cryptocurrency ventures. Inspired by the model of Bitcoin Beach in El Salvador, Próspera not only adopted Bitcoin as a legal tender but also sought to emulate the financial independence seen in other international charter city projects.
However, the situation took a turn when local authorities, led by Roatán Mayor Ron Mcnab, enforced a closure due to non-compliance with tax obligations. Mayor Mcnab emphasized the necessity of upholding local laws and dismissed Próspera’s status as a quasi-independent entity, criticizing its management for failing to meet financial and operational commitments, including environmental and construction permits. The enforcement included deploying armed police forces to ensure the cessation of administrative activities within the zone’s central facilities.
The Clash of Governance and Vision
On the defensive, Próspera’s management has vehemently disputed the mayor’s claims, asserting that they have fully complied with all legal and regulatory requirements. Jorge Colindres, the technical secretary of the ZEDE, affirmed the zone’s adherence to national and international legal frameworks that supposedly protect its operation for a span of 50 years, based on agreements signed by the Honduran government a decade prior. Colindres cited articles from the constitution and the ZEDE’s Organic Law that grant financial and regulatory autonomy, aiming to safeguard the zone against such unilateral closures.
The conflict traces back to political shifts within Honduras, particularly after President Xiomara Castro’s administration began in January 2022. President Castro has expressed opposition to the ZEDEs, viewing them as infringements on national sovereignty. This stance culminated in September last year when the Supreme Court of Honduras deemed the ZEDEs unconstitutional, further complicating the legal standing of projects like Próspera.
As Próspera confronts these challenges, the future of this innovative economic experiment remains uncertain. With no set date for resuming operations and ongoing legal battles, the project’s stakeholders are hopeful for a political change that could come with the national elections scheduled for November 2025, potentially reinvigorating their initiative. Meanwhile, the closure has effectively placed the Bitcoin Citadel in a state of legal limbo, prompting a deeper reconsideration of the balance between innovation-driven economic zones and national governance.