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CNBS Bans Institutions from Trading Crypto in Honduras

The regulatory authority CNBS in Honduras has issued a resolution prohibiting the Central American country’s financial system from engaging in the trading of cryptocurrencies and similar virtual assets.

The National Banking and Securities Commission said the resolution, dated from Monday and disclosed on Friday, takes immediate effect. It explicitly forbids supervised institutions from holding, investing, facilitating, or trading in cryptocurrencies, crypto-assets, virtual currencies, tokens, or any comparable virtual assets that are not authorized by the central bank.

Although Honduran law currently lacks regulations for crypto assets, various trading platforms operate within the country. The National Banking and Securities Commission expressed concern that many of these platforms operate across multiple jurisdictions, making it challenging for Honduran law to exert control.

This situation poses a risk of involvement in fraudulent activities, money laundering, and terrorist financing. The Honduran central bank clarified that it does not assume responsibility for nor guarantee any transactions involving these assets.

In March 2022, the central bank revealed ongoing considerations regarding the technical and legal feasibility of introducing its own digital currency, subject to regulation and acknowledgment as legal tender. However, a decision on this matter has not been announced.

Notably, Honduras Prospera, a model resort town with administrative, fiscal, and budgetary autonomy (ZEDE) on the Caribbean, declared in April 2022 its adoption of bitcoin as legal tender within its borders.

The impact of the CNBS new policy on this initiative remains uncertain.

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