The National Banking and Securities Commission of Honduras (CNBS) has taken a firm stance against cryptocurrencies by issuing a resolution that prohibits the country’s financial institutions from engaging with crypto. The CNBS justified its decision by stating that the Honduran central bank cannot ensure the security of crypto transactions due to the lack of regulation surrounding them.
The resolution emphasizes the potential risks associated with using cryptocurrencies and financial services based on blockchain technology. It warns that users may be vulnerable to fraud, as well as operational and legal pitfalls. It also highlights the fact that the acceptance of cryptocurrencies is not legally binding and can be revoked at any time.
Additionally, the CNBS expressed concern over the potential misuse of crypto assets for illicit activities such as money laundering and terrorism financing. In light of these risks, the resolution mandates that supervised institutions refrain from holding derivative instruments based on crypto assets. Furthermore, it stipulates that educational programs on financial literacy must include information about the dangers associated with crypto assets.
It should be noted that despite these restrictions, crypto exchanges continue to operate without hindrance in Honduras.
The CNBS operates under the authority of the Honduran presidential administration. The resolution, which was dated February 12 and released on February 15, was unanimously approved and is effective immediately.
In a related development, the Honduran central bank issued a warning in March 2022 regarding the use of cryptocurrencies. This came after reports suggested that Honduras might follow in the footsteps of El Salvador by adopting Bitcoin as legal tender. The central bank also revealed that it was exploring the possibility of issuing a central bank digital currency.
Despite these cautious measures, Bitcoin has managed to gain some traction in Honduras. The country is now home to Bitcoin Valley, a project that was launched in the summer of 2022 with the aim of attracting tourists who can pay in Bitcoin, US dollars, or the Honduran lempira. Furthermore, Honduras is also home to Próspera, a city located in a special economic zone on the island of Roatan, where Bitcoin was declared legal tender in 2022 and recognized as a unit of accounting in January. It remains unclear how the CNBS resolution will impact these areas.
In the United States, proposed regulations on cryptocurrencies are being driven by lawmakers’ concerns and uncertainties, as highlighted in a recent magazine article.