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The National Banking and Securities Commission of Honduras banned the use of cryptocurrency due to a lack of regulation in the country.
The National Banking and Securities Commission (CNBS) of Honduras made a decision to ban financial institutions in the country from using cryptocurrencies. The Central Bank of Honduras stated that it cannot guarantee due to the lack of regulation of crypto transactions.
Governments have stated that users of cryptocurrencies and financial services based on blockchain technology might be susceptible to fraud, operational risks, and legal risks. This indicates that cryptocurrencies may not be accepted or legally recognized at any time.
Because they are unregulated, there is a concern that crypto assets could be used in illegal activities such as fraud, money laundering and terrorist financing. For this reason, the CNBS has made the following decision regarding cryptocurrencies:
“The institutions under the supervision of the National Banking and Securities Commission are prohibited from investing in, maintaining, mediating, or operating cryptocurrencies, digital assets, virtual currencies, tokens, or any similar virtual assets.”
Honduras Government Prohibits
Possession of derivative instruments based on crypto assets by the institutions under supervision has also been prohibited. Furthermore, it has been stated that potential risks of crypto assets should be included in financial education programs. It has been stated that crypto exchanges can operate freely in Honduras.
The CNBS is part of the Honduran presidential administration. It was announced that the decision dated February 12 was published on February 15 and unanimously approved, and it was also immediately put into effect.
In March 2022, the Central Bank of Honduras issued a warning about the use of crypto, and it was reported in the press that the country could follow El Salvador’s leadership with Bitcoin. The central bank made this warning when the price of Bitcoin was around 51,973 dollars. Additionally, the central bank stated that it examined the issue of digital currency.
I have now been in Honduras for about one month.
I am here attending the two months long popup city #Vitalia, an event at the frontier of technology and policy, where 200+ attendees with backgrounds in biotech, crypto, AI and charter cities live, work, and learn together.
Some… pic.twitter.com/aYNfjB5lME
— Petar Čekerevac (@pcekerevac) February 10, 2024
However, Bitcoin made some inroads in Honduras. The country hosts Bitcoin Valley, which opened in the summer of 2022. In this valley, efforts are being made to attract tourists who can pay with Bitcoin as well as the US dollar or the Honduran lempira.
Also, Honduras is home to the city of Próspera in the special economic zone on the island of Roatan. In this city, it was determined in January 2022 that Bitcoin was accepted as legal tender and as an accounting unit. It is unclear how the CNBS decision will affect these areas.