The Honduras Banking Regulator Bans Cryptocurrency Trading
The National Banking and Securities Commission (CNBS) in Honduras has implemented immediate measures to prohibit institutions under its authority from engaging in cryptocurrency trading. This move aims to mitigate the risks of fraud and money laundering. Despite the absence of formal legislation regulating cryptocurrencies in the country, the CNBS has taken this action. It instructs entities not to maintain, invest, intermediate, or trade in unauthorized cryptocurrencies or virtual assets.
Challenges in Controlling Crypto-related Service Providers
Honduras faces challenges in controlling crypto-related service providers operating within its jurisdiction, as many are based in multiple countries. The lack of formal regulations makes it difficult to manage these providers and address illicit activities associated with them. However, the CNBS had previously expressed interest in issuing its own digital currency but has not released any information about it since 2022.
Honduras Bitcoin Unit of Account Status
While the central bank prohibits cryptocurrency trading, other entities in Honduras are embracing cryptocurrencies like Bitcoin for regular transactions. Próspera ZEDE, a special economic zone, officially recognizes Bitcoin as a unit of account for various commercial, tax, and financial transactions. This recognition aligns with the growing interest in digital assets across Central America as residents seek alternatives to combat inflation and currency devaluation. Although rumors circulated about Honduras potentially adopting Bitcoin as legal tender like El Salvador, no official developments have emerged.
Growth of Crypto-related Infrastructure
The increased interest in cryptocurrencies has also led to the growth of related products and infrastructure, such as the installation of Bitcoin ATMs in the region.
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