The Honduras banking regulator has implemented immediate measures prohibiting institutions under its authority from engaging in cryptocurrency trading.
In a resolution, the National Banking and Securities Commission or CNBS noted that the move takes effect immediately and aims to mitigate the risks of fraud and money laundering, Reuters reported on February 16.
Entities under its mandate are instructed not to ‘maintain, invest, intermediate, or trade in cryptocurrencies, crypto-assets, virtual currencies, tokens, or similar virtual assets not issued or authorized by the central bank’.
Notably, this ban was imposed despite the absence of formal legislation regulating cryptocurrencies in the Central American country.
However, various crypto-related service providers operate within Honduras, with CNBS highlighting that many are based in multiple jurisdictions. Due to their registration in different countries, Honduras faces challenges in controlling them, especially concerning illicit activities.
Despite the lack of formal crypto-related regulations, the institution had previously indicated its consideration of the technical and legal viability of issuing its own digital currency, which would be regulated and recognized as legal tender. Since the 2022 declaration, no information about the currency has been made public.
Honduras Bitcoin unit of account status
Contrary to the central bank’s decision, other entities in the country are embracing initiatives involving cryptocurrencies like Bitcoin for regular transactions.
Finbold reported that Próspera ZEDE, the special economic zone in Honduras, officially recognized Bitcoin (BTC) as a unit of account, acknowledging its legitimacy in various commercial, tax, and financial transactions.
“Próspera ZEDE recognizes the right of (e)Resident legal entities organized or registered under the authority of the Prospero Entity Registry Statute to use Bitcoin (“BTC”) as their respective unit of account, in the sense of the monetary unit or measure of value in terms of which their accounts are kept and values stated,” the entity noted.
Interestingly, this move coincides with growing interest in digital assets across Central America, driven by residents turning to cryptocurrencies to counter rising inflation and local currency devaluation.
While rumors circulated about Honduras potentially following El Salvador’s lead in adopting Bitcoin as legal tender, no official developments have emerged.
The surge in interest in cryptocurrencies has also led to related products and infrastructure growth, such as installing Bitcoin ATMs in the region.
Source: https://finbold.com/honduras-regulator-bans-banks-from-trading-crypto/