The Honduras banking regulator has taken immediate action to restrict cryptocurrency trading among institutions under its authority. This measure, which went into effect immediately, aims to prevent fraud and money laundering, according to a report by Reuters on February 16.
Under this resolution, entities within the regulator’s jurisdiction are prohibited from maintaining, investing, intermediating, or trading in any cryptocurrencies, crypto-assets, virtual currencies, tokens, or similar virtual assets that are not issued or authorized by the central bank. This ban was implemented even though the country does not have formal legislation in place to regulate cryptocurrencies.
Despite the lack of formal regulations, there are various crypto-related service providers operating in Honduras, many of which are based in multiple jurisdictions. This presents a challenge for the country in terms of controlling these providers and preventing illicit activities.
The CNBS, however, has previously expressed interest in exploring the possibility of issuing its own digital currency, which would be regulated and recognized as legal tender. However, since the announcement in 2022, no further information about this currency has been made public.
In contrast to the central bank’s decision, other entities in Honduras are embracing the use of cryptocurrencies, particularly Bitcoin, for regular transactions. The special economic zone of Próspera ZEDE has officially recognized Bitcoin as a unit of account, meaning it can be used in various commercial, tax, and financial transactions.
This move comes at a time when there is a growing interest in digital assets in Central America, as individuals turn to cryptocurrencies to protect against rising inflation and devaluation of local currencies. While there were rumors of Honduras potentially following El Salvador’s lead in adopting Bitcoin as legal tender, there have been no official developments on this front.
The increasing interest in cryptocurrencies has also led to the growth of related products and infrastructure, such as the installation of Bitcoin ATMs in the region.