Honduras attracts cryptocurrency investors with Bitcoin Valley

A small tourist town in Honduras has begun accepting Bitcoin (BTC) payments as part of a Bitcoin Valley initiative designed to increase tourism revenue through 60 local businesses.

Some Santa Lucia locals, such as shopping center owner Cesar Andino, expect the initiative to open up more opportunities for shops in the area and “attract more people who want to use this currency,” according to a report by Honduran news outlet La Prensa. Andino added:

“Accepting Bitcoin will allow us to open up another market and gain more customers. We have to globalize. We cannot isolate ourselves from technology, and we cannot be left behind while other countries are already doing so.”

The program began Thursday, allowing patrons of local stores to pay in US dollars, Honduran lempira or bitcoin.

The Bitcoin Valley program was developed by the municipal government of Santa Lucia in conjunction with crypto exchange Coincaex, Blockchain Honduras, and the University of Technology of Honduras.

Coincaex provides equipment and services for making crypto payments, while Blockchain Honduras provides education on the use of crypto wallets.

La Prensa explained that while customers can pay for goods and services in BTC, they will send the coins to the Coincaex exchange. The exchange then immediately sends the value of BTC in Lempira to the trader to help them avoid loss from price volatility. Therefore, business owners do not receive BTC directly as payment under this scheme.

Local business owners hope Bitcoin Valley will revitalize tourism spending in the coastal, tropical country after it took a major hit during the COVID-19 pandemic. Honduras enjoyed about $556 million in annual tourism spending in 2019 before declining more than 66% in 2020 to $189 million according to data from Macrotrends, a tracker of the global economy.

Honduras joins a handful of countries in the region that have launched similar programs for people to pay for goods and services legally using cryptocurrencies.

Related: Morgan Stanley encourages investors to buy Eurobonds in El Salvador

El Salvador is best known for adopting Bitcoin as a legal currency in 2021 and has made a nationwide effort to educate the population about its usefulness. It has launched a similar tourist attraction to Bitcoin Beach in the town of El Zonte.

Guatemala has its own Bitcoin Lake initiative in the tourist spots around Lake Atitlan in the Sierra Madre Mountains. Panajachel Mayor Cesar Pedrasanta in the region has also been mining bitcoin using energy that he says would otherwise be unused and wasted.