Honduras Bans Trading of Cryptocurrencies Citing Money Laundering Concerns
The National Banking and Securities Commission (CNBS) of Honduras has implemented a ban on the country’s financial system from trading in cryptocurrencies and other virtual assets. The CNBS expressed concerns about potential money laundering and fraud, prompting the immediate enforcement of the ban. The resolution, which was made public on February 16, 2024, highlighted the risks associated with crypto transactions, particularly the lack of regulation and legal recognition as a means of payment.
Honduras Law Does Not Currently Regulate Crypto Assets
The CNBS resolution explicitly prohibits the trading of cryptocurrencies and related digital assets within the Honduras financial system. It cited the risks of fraud and money laundering as the rationale for the ban. The resolution also emphasized that users of blockchain-based financial services may face operational and legal dangers, as there is no legal obligation for recognition or acceptance of these assets as a valid form of payment. The unregulated nature of cryptocurrencies poses significant risks in terms of fraudulent activities, money laundering, and terrorist financing.
The resolution by CNBS prevents supervised institutions from maintaining, investing, intermediating, or trading in cryptocurrencies, crypto-assets, virtual currencies, tokens, or any similar virtual assets not authorized by the central bank. While there is currently no legislation in place governing crypto assets in Honduras, the trading platforms operating in the country are subject to the ban due to their potential involvement in illicit activities.
Resolution Bans Institutions from Holding Crypto Derivative Instruments
In addition to the ban on trading cryptocurrencies and virtual assets, the CNBS resolution prohibits supervised institutions from holding crypto-based derivative instruments. It also mandates the inclusion of information about the risks associated with cryptocurrencies in financial education programs. Despite the ban, Honduras previously established a “Bitcoin Valley” in Santa Lucia, a town known for its tourism. In this designated area, nearly 60 businesses accept Bitcoin as a form of payment, aiming to attract crypto investors worldwide.
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