Aiming to become a cryptocurrency hub in the region, the Central American country of Honduras has launched a ‘Bitcoin valley’ in its tourist town of Santa Lucia. As many as 60 businesses in the town are now accepting Bitcoin as payment in an effort to attract crypto investors from different parts of the world.
Honduras has become the newest country to see a town accept cryptocurrency as a form of payment as the tourist town of Santa Lucia, a mere 20 minutes drive from the capital of Tegucigalpa, now has a ‘Bitcoin Valley.’ The launch is a bid to attract more tourism to the area. The ‘Bitcoin Valley’ project will see 60 businesses initially get trained and adopt cryptocurrencies to market their products and services, expecting to spread these practices to more enterprises and nearby areas, per a report by Reuters.
The initiative was developed by Santa Lucia’s municipal government in conjunction with the Coincaex cryptocurrency exchange, Blockchain Honduras, and the Technological University of Honduras. Coincaex is responsible for providing the equipment and services needed to perform crypto payments, while Blockchain Honduras is providing education on the use of crypto wallets.
Professor at the Technological University, Ruben Carbajal Velazquez, said,
Santa Lucia's community will be educated to use and manage cryptocurrencies, implementing them in different businesses in the region and generating crypto-tourism.
Central America Hones in on Crypto
Many Latin American countries are exploring the potential of cryptocurrencies, but the risks remain high. El Salvador adopted Bitcoin as legal tender in September 2021 having its own Bitcoin Beach surfing spot in the town of El Zonte. El Salvador’s bet on Bitcoin has been hampered due to the crypto market downturn and has publicly disclosed that its Bitcoin holdings once worth $105 million are now worth about $57 million.
To deal with the inherent volatility associated with the market, ‘Bitcoin Valley’ will “enable merchants to receive instant payments in local currency, eliminating cryptocurrency fluctuation risks,” according to Leonard Paguanda, founder of the Blockchain Honduras organisation. In April, earlier this year, the Honduras Economic Zone recognised Bitcoin as legal tender and allowed taxes to be paid in the cryptocurrency. It has also since permitted entities to issue Bitcoin bonds.
As more and more regions in the world adopt digital currencies, the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) have both made public statements about the risks associated with cryptocurrencies. The BIS has said that its fear about cryptocurrencies has come to be realised, referring to the recent market crash and the implosion of TerraUSD. The IMF has also expressed its concern over adopting Bitcoin as legal tender in El Salvador and the Central African Republic and has also said that decentralised finance poses a risk to financial markets and regulation is urgently required.