In an unprecedented move, a coalition of 85 economists has publicly backed the Honduran government's decision to exit a World Bank arbitration entity, signaling a new phase in the ongoing conflict with Próspera, the U.S.-based company vying to establish a crypto island on Roatán. This support introduces a pivotal twist in the tale of Próspera, which sought an astonishing $10.8 billion in damages following a legislative shift that annulled the island's unique economic zone status.
Próspera, envisioned as a Bitcoin-friendly haven, found itself at odds with the Honduran state after the 2022 revocation of laws that ensured its special economic zone's legal stability. The discord escalated to the International Centre for Settlement of Investment Disputes (ICSID), where Próspera laid its claim, arguing Honduras reneged on a half-century stability guarantee.
The economists' open letter, under the aegis of Progressive International, criticized the effectiveness of arbitration bodies like ICSID, questioning their role in stimulating foreign investment. They argued that such mechanisms have historically constrained governments' regulatory autonomy, impacting consumer, worker, and environmental protections.
The dispute touches on deeper issues within Honduran society, including the impact of Zones of Employment and Economic Development (ZEDEs) and concerns over indigenous and Afro-descendant communities' rights. Próspera's ambitions, which once promised to embed blockchain technologies and Bitcoin within its administrative fabric, now face significant legal and social hurdles.
As the situation unfolds, the backing by the economist group not only underscores the complexities of international investment disputes but also highlights the broader implications of such projects on democracy, sovereignty, and social equity in Honduras.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
