Key takeaways:
- Financial institutions in Honduras are not permitted to handle cryptocurrency, according to a resolution published by the CNBS.
- The resolution stated that because cryptocurrency is unregulated, it can be used for money laundering, fraud, and terrorism financing.
Financial institutions in Honduras are not permitted to handle cryptocurrency, according to a resolution published by the National Banking and Securities Commission (CNBS).
As cryptocurrencies are unregulated, the Honduran central bank stated that it cannot guarantee cryptocurrency transactions.
As people are not required by law to transact with cryptocurrencies or accept them as a form of payment, the resolution warned that users of these assets and financial services built on blockchain technology could be subject to fraud as well as operational and legal risks, including the possibility that their acceptance could end at any time.
Furthermore, the resolution said that crypto might be used for fraud, money laundering, and financing terrorism because it is uncontrolled. The CNBS consequently decided to:
“Prohibit institutions supervised by the National Banking and Securities Commission from maintaining, investing, intermediating or operating with cryptocurrencies, crypto assets, virtual currencies, tokens or any other similar virtual asset.”
Supervised institutions are also forbidden to own derivatives based on cryptocurrency assets. The resolution required financial education initiatives to cover the dangers of holding crypto assets. There are open cryptocurrency exchanges in Honduras.
The Honduran presidential administration includes the CNBS. On February 15, the February 12 resolution was made public. It stated that it was unanimously accepted and is effective now.
In March 2022, the Honduran central bank issued a caution regarding using cryptocurrencies in response to press reports suggesting that the nation would follow El Salvador‘s example and legalize Bitcoin. Simultaneously, it declared that it was investigating central banks’ issuing of digital currency.
Still, there has been some traction for Bitcoin in Honduras. The nation is home to Bitcoin Valley, which debuted in the summer of 2022 with the intention of drawing visitors who could make payments with Bitcoin, US dollars, or lempiras from Honduras.
In addition, Próspera, a city in the Roatan special economic zone on the island of Honduras, is home to Bitcoin, which was accepted as legal money in 2022 and recognized as an accounting unit in January. How the CNBS resolution will impact such places is unknown.
