Amid regulatory concerns, Honduras’ National Banking and Securities Commission (CNBS) has passed a resolution prohibiting financial institutions in the country from engaging with cryptocurrencies.
The decision was made after the Honduran central bank said that it was unable to guarantee crypto transactions because they were not regulated. According to the resolution, individuals utilizing cryptocurrencies and financial services reliant on blockchain technology might face potential risks such as fraud, operational challenges, and legal uncertainties.
The Commission noted that the acceptance of these assets could be revoked at any time, as there is no legal obligation for people to conduct transactions or acknowledge them as valid forms of payment. As a result, it resolved to:
“Prohibit institutions supervised by the National Banking and Securities Commission from maintaining, investing, intermediating or operating with cryptocurrencies, crypto assets, virtual currencies, tokens or any other similar virtual asset.”
In addition, regulated institutions are forbidden from possessing derivative instruments linked to crypto assets. The resolution mandated the inclusion of the risks associated with crypto assets in financial education programs. But surprisingly, crypto exchanges are allowed to operate without restrictions in Honduras.
The CNBS operates within the framework of the Honduran presidential administration, and the resolution, dated February 12, was officially published on last Thursday, noting unanimous approval and immediate enforcement.
In March 2022, the Honduran central bank cautioned against the utilization of cryptocurrencies following media speculation that the nation might emulate El Salvador in adopting Bitcoin as legal tender. Concurrently, it announced ongoing deliberations regarding the potential issuance of a central bank digital currency.
However, Bitcoin has gained some traction within Honduras. The nation hosts Bitcoin Valley, which was established in the summer of 2022 to appeal to tourists who can make payments in Bitcoin, USD, or the Honduran lempira.
Honduras is also home to Próspera, a city within a special economic zone on Roatán Island, where Bitcoin was established as legal tender in 2022 and recognized as a unit of accounting in January. So far, the potential impact of the latest CNBS resolution on these regions remains uncertain.
Meanwhile, in the UK, the Financial Conduct Authority (FCA) has flagged over 400 crypto-related promotions.
