The National Banking and Securities Commission of Honduras (CNBS) has taken a strong stance against cryptocurrencies by issuing a resolution that prohibits the country’s financial institutions from dealing with them. According to the CNBS, the use of cryptocurrencies and blockchain-based financial services exposes users to various risks, including fraud and legal complications. Furthermore, the unregulated nature of crypto assets makes them susceptible to being used for illicit activities such as money laundering and terrorism financing. To address these concerns, the CNBS has not only banned supervised institutions from holding derivative instruments based on crypto assets but has also mandated the inclusion of information about the risks associated with crypto assets in financial education programs.
It is worth noting that crypto exchanges continue to operate without restrictions in Honduras. The CNBS, which is part of the Honduran presidential administration, released the resolution on February 15, 2022. The resolution, approved unanimously, immediately went into effect.
This move by the CNBS comes after the Honduran central bank issued a warning in March 2022 regarding the use of cryptocurrencies. The warning was prompted by reports suggesting that Honduras might follow in the footsteps of El Salvador by adopting Bitcoin as legal tender. At the same time, the central bank expressed its interest in exploring the possibility of issuing a central bank digital currency.
Despite the regulatory concerns, Bitcoin has gained some traction in Honduras. The country is home to Bitcoin Valley, a project that was launched in the summer of 2022 with the aim of attracting tourists who can make payments in Bitcoin, US dollars, or the local currency, Honduran lempira. Additionally, Honduras is also home to Próspera, a city located in a special economic zone on the island of Roatan, where Bitcoin has been legalized as tender and designated as a unit of accounting. The impact of the CNBS resolution on these specific areas remains uncertain.
In a related development, proposed regulations on cryptocurrencies in the United States are being driven by lawmakers’ fears and doubts about the industry.