The First Steps towards a Bitcoin-Based Economy
The city of Prospera in Honduras is leading the way in adopting a pure bitcoin-based economy. On January 5, the city announced its approval of using bitcoin as a unit of account, allowing for prices and taxes to be denominated and paid using bitcoin.
A Vision of Financial and Monetary Freedom
Jorge Colindres, the General Secretary of Prospera, expressed his support for this decision. He emphasized the importance of financial freedom and monetary freedom, stating that people should have the right to carry out transactions, manage their accounting, and report taxes in the currency of their choice.
Unlocking the Potential of a Bitcoin Circular Economy
By adopting BTC as a unit of account, Prospera opens up possibilities for establishing a bitcoin circular economy within the city. Since bitcoin has been approved as legal tender since 2022, this move presents an exciting opportunity for residents and businesses, paving the way for a modern and efficient economic ecosystem in this pioneering city.
Challenges in Implementing Bitcoin Tax Payments
While the adoption of bitcoin as a unit of account is a significant step, the payment of taxes in BTC is still on hold due to external regulatory issues and technical limitations with the electronic tax payment system. As a result, tax duties will be declared in BTC but reported to authorities in either U.S. dollars or Honduran lempiras.
Prospera's Independent Decision
While there were previous rumors about Honduras adopting bitcoin as legal tender in 2022, the country's central bank clarified that bitcoin is not a regulated currency and does not have the status of legal tender. However, Prospera, under the Development and Employment Zone (ZEDE) designation, has the autonomy to make independent decisions. This has led to criticism from some members of Honduran society who view these zones as a violation of the country's constitution and territorial sovereignty.
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Frequently Asked Questions
How much should your IRA include precious metals
The most important thing you should know when investing in precious metals is that they are not just for wealthy people. They don't require you to be wealthy to invest in them. In fact, there are many ways to make money from gold and silver investments without spending much money.
You could also consider buying physical coins like bullion bars, rounds or bullion bars. You could also buy shares in companies that produce precious metals. You may also be interested in an IRA transfer program offered by your retirement provider.
You will still reap the benefits of owning precious metals, regardless of which option you choose. These metals are not stocks, but they can still provide long-term growth.
They also tend to appreciate over time, unlike traditional investments. If you decide to make a sale of your investment in the future, you will likely realize more profit than with traditional investments.
What are the pros & cons of a Gold IRA?
An Individual Retirement Account (IRA), unlike regular savings accounts, doesn't require you to pay tax on interest earned. An IRA is a great way to save money and not have to pay taxes on the interest you earn. But, this type of investment comes with its own set of disadvantages.
For example, if you withdraw too much from your IRA once, you could lose all your accumulated funds. The IRS may prohibit you from withdrawing funds from your IRA before you are 59 1/2 years of age. A penalty fee will be charged if you decide to withdraw funds.
Another disadvantage is that you must pay fees to manage your IRA. Most banks charge 0.5% to 2.0% per annum. Others charge management fees that range from $10 to $50 per month.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. A majority of insurance companies require that you possess a minimum amount gold to be eligible for a claim. Some insurers may require you to have insurance that covers losses up $500,000.
If you decide to open a gold IRA, it is important to know how much you can use. You may be limited in the amount of gold you can have by some providers. Others allow you the freedom to choose your own weight.
You will also have to decide whether to purchase futures or physical gold. The price of physical gold is higher than that of gold futures. Futures contracts allow you to buy gold with more flexibility. They enable you to establish a contract with an expiration date.
You will also have to decide which type of insurance coverage is best for you. Standard policies don't cover theft protection, loss due to fire, flood or earthquake. It does include coverage for damage due to natural disasters. If you live in a high-risk area, you may want to add additional coverage.
Insurance is not enough. You also need to think about the cost of gold storage. Storage costs will not be covered by insurance. Additionally, safekeeping is usually charged by banks at around $25-$40 per monthly.
You must first contact a qualified custodian before you open a gold IRA. Custodians keep track of your investments and ensure compliance with federal regulations. Custodians aren't allowed to sell your assets. Instead, they must keep your assets for as long you request.
Once you have chosen the right type of IRA to suit your needs, it is time to fill out paperwork defining your goals. Information about your investments such as stocks and bonds, mutual fund, or real property should be included in your plan. Also, you should specify how much each month you plan to invest.
After filling in the forms, please send them to the provider. After reviewing your application, the company will send you a confirmation mail.
When opening a gold IRA, you should consider using a financial planner. Financial planners have extensive knowledge in investing and can help determine the best type of IRA to suit your needs. They can also help reduce your costs by suggesting cheaper options for purchasing insurance.
What Is a Precious Metal IRA?
You can diversify your retirement savings by investing in precious metal IRAs. This allows you to invest in gold, silver and platinum as well as iridium, osmium and other rare metals. These are “precious metals” because they are hard to find, and therefore very valuable. These are excellent investments that will protect your wealth from inflation and economic instability.
Precious metals are sometimes called “bullion.” Bullion refers actually to the metal.
Bullion can be purchased through many channels including online retailers and large coin dealers as well as some grocery stores.
You can invest directly in bullion with a precious metal IRA instead of buying shares of stock. This will ensure that you receive annual dividends.
Precious metal IRAs are not like regular IRAs. They don't need paperwork and don't have to be renewed annually. You pay only a small percentage of your gains tax. You also have unlimited access to your funds whenever and wherever you wish.
What precious metal is best for investing?
Answering this question will depend on your willingness to take some risk and the return you seek. While gold is considered a safe investment option, it can also be a risky choice. For example, if you need a quick profit, gold may not be for you. You should invest in silver if you have the patience and time.
If you don’t want to be rich fast, gold might be the right choice. If you are looking for a long-term investment that will provide steady returns, silver may be a better choice.
Can the government take your gold?
Your gold is yours and the government cannot take it. You worked hard to earn it. It belongs to you. This rule could be broken by exceptions. For example, if you were convicted of a crime involving fraud against the federal government, you can lose your gold. If you owe taxes, your precious metals could be taken away. You can keep your gold even if your taxes are not paid.
Is buying gold a good retirement plan?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
Physical bullion bar is the best way to invest in precious metals. You can also invest in gold in other ways. Research all options carefully and make an informed decision about what you desire from your investments.
If you don’t have the funds to invest in safe places, such as a safe deposit box or mining equipment companies, buying shares of these companies might be a better investment. Owning gold stocks should work well if you need cash flow from your investment.
You also can put your money into exchange-traded funds (ETFs), which essentially give you exposure to the price of gold by holding gold-related securities instead of actual gold. These ETFs usually include stocks of precious metals refiners or gold miners.
Statistics
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
cftc.gov
investopedia.com
- Are You a Good Candidate for a Gold IRA
- What are the Options Types, Spreads, Example, and Risk Metrics
wsj.com
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Legal – WSJ
finance.yahoo.com
How To
The History of Gold as an Asset
From the beginning of history, gold was a popular currency. It was universally accepted due to its purity and divisibility, beauty, scarcity, and durability. Because of its intrinsic value, it was also widely traded. However, since there were no international standards for measuring gold at this point, different weights and measures existed worldwide. One pound sterling in England was equivalent to 24 carats silver, while one livre tournois in France was equal 25 carats. In Germany, one mark was equivalent to 28 carats.
The United States began issuing American coin made up 90% copper, 10% zinc and 0.942 fine-gold in the 1860s. This resulted in a decline of foreign currency demand and an increase in the price. This was when the United States started minting large quantities of gold coins. The result? Gold prices began to fall. The U.S. government needed to find a solution to their debt because there was too much money in circulation. They sold some of their excess gold to Europe to pay off the debt.
Because most European countries did not trust the U.S. dollar, they started accepting gold as payment. Many European countries began to use paper money and stopped accepting gold as payment after World War I. Since then, the price of gold has increased significantly. Today, although the price fluctuates, gold remains one of the safest investments you can make.
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By: Sergio Goschenko
Title: Prospera Adopts Bitcoin as Unit of Account: Paving the Way for a Bitcoin Circular Economy
Sourced From: news.bitcoin.com/honduran-city-of-prospera-adopts-bitcoin-as-unit-of-account/
Published Date: Tue, 09 Jan 2024 14:30:46 +0000
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