Crypto Millionaires Build Their Own Cities in Central America

Initially, Romer cooperated with the Honduran government, but they parted ways after disagreements over how to implement his idea. (Romer did not respond to a request for comment.)

Próspera, which kicks off work in 2020, plans to implement ultra-low taxes, outsource services normally managed by the public sector, establish “arbitration centers” in lieu of courts, and charge citizenship every year. years (either physical or electronic residence) involved entering into a “social contract” that the company hopes will discourage misconduct.

When I visited the site in February, the central office was one of the few completed buildings. There is no private Próspera police force, but on the front desk is the number for Bulldog Security International, a private security company engaged by hotels on the island that considers the local police force to be inadequate. A pair of two-story buildings housed office workers. The rest is largely a construction site, although a residential tower block is in progress.

Próspera’s drawings of the future show the apartments seemingly inspired by the island’s native conch shells — soft curves in pearl coral, cream and glass. A strip of white sand separates the apartment complex located in the calm Caribbean Sea.

The businesses most likely to be attracted here are those looking to escape the regulations in their home countries — Próspera’s chief human resources officer, Trey Goff, emphasizes medical innovation, health tourism and every aspect of the cryptocurrency industry.

“There is a degree of automatic overlap with the crypto industry and what we are doing,” he said. “Because they see themselves as at the forefront of financial innovation and we want to enable that.”

bitcoin butterfly


A number of people working in the tech and cryptocurrency sectors have established remote jurisdiction through its e-residency program. Businesses are free to transact in any cryptocurrency of their choice, and five have been approved for government use.

Próspera’s advisors include Oliver Porter, founder of Sandy Springs, Georgia – until recently a fully privatized city in the US that Próspera’s outsourcing model would emulate. So far, Silicon Valley venture capitalists and private investors have invested $50 million in the project, Próspera said, with another $100 million funding round underway.

The money raised so far includes money from billionaire Peter Thiel, venture capitalist Marc Andreessen, and investors Roger Ver and Balaji Srinivasan through Pronomos Capital. Pronomos Capital told Bloomberg In 2018, they discussed establishing semi-autonomous cities in countries including Ghana, Honduras, Marshall Islands, Nigeria and Panama.

Broken link

If you continue along the road leading to Próspera, you will soon come across a village of about 100 people called Crawfish Rock. Tucked away in a patch of forest on the seashore is a collection of wooden houses, painted in faded colors and built on stilts. Chickens scratch at patches of weeds growing under the palm trees. That’s a long way from the dazzling whites of Próspera’s air-conditioned meeting rooms.

At Crawfish Rock, I was greeted by Luisa Connor, the village head of Patronato, or community department. She belongs to the Garifuna community — a descendant of slaves brought to the island by British colonists in the late 1700s. Sitting on plastic chairs in the yard as her young daughter played nearby, we discussed about outcry against Próspera, which morphed from a community-led effort into a national effort against ZEDE. Connor paints a picture of deception on the part of Próspera, saying that it describes itself as a regular tourist development when it asks the community to sign a consent form, promising that villagers will be accommodated. provide the first jobs in the area.

However, the villagers soon discovered that the project was going to be something quite different, and relationships quickly soured. Connor said Próspera CEO Erick Brimen has offered to acquire Crawfish Rock outright; she refused on behalf of the village. But residents are increasingly concerned that Próspera will take their land to make way for the expanding city.

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Land grabbing takes a long time, bloody history in Honduras. Successive governments have empowered companies to plunder land from farmers — leading to conflict inside somewhere That alone has resulted in more than 150 murders and disappearances since 2008.

Daniel Frazee, Próspera’s chief executive officer, said the company’s contract prevents the company from expropriating land and plans to expand in directions where settlements are not available. But Connor says that after she turned down Brimen’s offer, he told her the Honduran government would probably seize it. Asked about Connor’s comments, Próspera denied trying to buy Crawfish Rock and said that its charter and bylaws prevent it from receiving confiscated land from the Honduran government.

The islanders with whom I spoke expressed fundamental opposition to the ceding of Honduran lands to corporate control. They “have no respect for government, no rules, no laws; just a dream,” Rosa Daniela, a community activist involved in the campaign against Próspera, told me. “They don’t believe they’re living in your country, because they want to start a new country.”

In the end, Connor blocked Brimen’s number. She says that the village is no longer in dialogue with Próspera. Goff put it another way: “Early on, we focused a lot on building strong community relationships with that community.”

Since the launch of Próspera, the political climate has changed. Amid the growing backlash against ZEDE based on concerns such as those raised at Crawfish Rock, the new president of Honduras, Xiomara Castro, has been running on a platform promising to shut it down. them, questioning the longevity of Próspera.

“We’re just an experiment”

“Earth is not yet broken in Bitcoin City, but the Conchagua Volcano has been home to a number of settlements, raising the specter of displacement,” said Salvadoran economist José Luis Magaña. “Especially only about a fifth of farmers in the area own the land they work on,” says Salvadoran economist José Luis Magaña.

The government says the project aims to provide jobs for the poor neighboring town of La Unión, but Magaña says the socioeconomic disparities between the town and El Salvador’s larger cities make progress is more likely to occur.

Unlike Próspera, Bitcoin City has the backing of the current government. But the influx of foreign investors and the displacement of locals could eventually trigger a similar backlash. Three days after Bitcoin City was announced, El Salvador passed a new law allowing the government to seize land for public use.

To prevent speculators from driving up land prices, the exact location of Bitcoin City remains obscure. But real estate companies from Europe, wealthy Salvadoran entrepreneurs and crypto companies have offered to buy back the land on which El Espíritu de la Montaña is located from Diaz for three to five times the price. he pays.

Diaz is adamant he won’t sell: “This is a project of a lifetime.” He supports Bukele and believes Bitcoin City will stimulate economic growth in the region, although he does note that people he knows in La Unión are concerned about being forced to move.

Back in Honduras, researcher José Luis Palma Herrera sees the ZEDEs and projects like them as a modern twist on the traumatic history of corporate colonialism in the region. “The promise of ending poverty and improving lives has been used to get people to accept these sieges of corruption and exploitation,” he said. “However, most of the profits from suburban areas go outside the country, [with] there is no real development in the areas they are already in. “

In addition to Próspera, there are three other ZEDEs in Honduras. Less radical private city projects are underway in Malawi and America. Ethereum Creator Vitalik Buterin Joined in conversation with the Zambian government on the establishment of a special economic zone using cryptocurrencies.

“We’re trying to help create a whole new kind of industry…the industry of building cities,” says Goff. He says he wants to see a few hundred developments around the world someday—“bright spots of prosperity, all working together to create a brighter future for humanity. ”

Not everyone is sold on dreams. In Roatán, Rosa Daniela worries about the impact on her community and others like it. “They came to us, adventurous boys, in the name of freedom,” she said. “They want to start with us; We are just a test. If they find success here, they will move to your country and other countries around the world.”

Laurie Clarke is a freelance technology journalist based in the UK.

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