The National Banking and Insurance Commission (CNBS) in Honduras has issued a circular prohibiting supervised banking and financial institutions from holding, investing, intermediating, or operating with cryptocurrencies, crypto assets, virtual currencies, and tokens. The move comes as the price of bitcoin (BTC) has exceeded $51,000.
According to the circular 003/2024, the CNBS has prohibited supervised institutions from maintaining any assets or liabilities tied to cryptocurrencies or virtual currencies that have not been issued or authorized by the Central Bank of Honduras. The commission has also ordered supervised institutions to include information on the potential risks associated with cryptocurrencies, crypto assets, or virtual currencies in their financial education programs.
Since 2018, governmental organizations in Honduras have warned citizens that cryptocurrencies do not have legal support and investors may not have protection in the event of price drops or scams. Carlos Leonardo Paguada Velásquez, founder of Blockchain Honduras, expressed concerns about the ambiguity of the CNBS statement and urged for further clarification on the scope of the prohibitions.
However, some organizations including Blockchain Honduras support the CNBS measures to regulate the use of cryptocurrencies to prevent scams and financial crimes. The CNBS has also highlighted the risks of money laundering and terrorist financing associated with virtual asset activities.
Hondurans have been investing in cryptocurrencies through international platforms, using credit cards to make purchases on exchanges such as Binance, Coinbase, Kraken, Bitfinex, and others. Some have also fallen victim to scams through international companies offering high returns for investing in portfolios that include cryptocurrencies.
The circular issued by the CNBS seeks to address these concerns and mitigate potential risks associated with cryptocurrency investments. It remains to be seen how the regulated entities and the general public will respond to the prohibition on operations with cryptocurrencies and virtual assets in Honduras.