With a new decision, the Honduran National Banking and Securities Commission (CNBS) banned the financial system in the country from trading in cryptocurrencies and similar “virtual” assets. The decision was made due to the lack of regulation in the cryptocurrency market and the risks of fraud and money laundering. Here are the details…
Cryptocurrency decision from Honduras
The decision, taken by CNBS on Monday but made public on Friday, “went into effect immediately.” Under the decision, CNBS-supervised institutions are prohibited from “custodying, investing, brokering or intermediating trade in cryptocurrencies, cryptoassets, virtual currencies, tokens or other similar virtual assets not issued or authorized by the central bank.”
There is currently no law regulating crypto assets in Honduras, but platforms that trade such assets operate in the country. CNBS noted that many of these platforms operate in multiple jurisdictions and therefore Honduran law cannot control them and pose a “risk of being involved in fraud, money laundering and terrorist financing activities.”
Bitcoin is legal in the special economic zone
The Central Bank of Honduras also announced that it was not responsible for such transactions and did not provide any guarantee. The Central Bank announced that it was examining the technical and legal feasibility of issuing its own cryptocurrency, which will be issued in March 2022 and will be considered legal tender. No decision has been announced yet on this matter.
Honduras Prospera is a region operating as a model resort in the Caribbean and operated as the administrative, fiscal and budgetary autonomous zone of Honduras Prospera (ZEDE). The region announced in April 2022 that it accepted Bitcoin as legal tender within its borders. The decision taken by CNBS adds a new dimension to the uncertainties and regulatory risks in the cryptocurrency market. It is wondered whether other countries will impose similar bans in the coming period.
Regulators’ decision is critical
The decision taken by CNBS is expected to have a significant impact on the cryptocurrency market in the country. The decision will make it difficult to buy, sell and invest in cryptocurrencies in Honduras and restrict the activities of Bitcoin and altcoin exchanges. Additionally, the decision could damage confidence in the cryptocurrency market and drive investors away from this market.
As a result, the ban on cryptocurrency transactions in Honduras is an important development for the crypto market. The possibility that this decision may encourage other countries to impose similar bans is met with concern. The future of the cryptocurrency market will largely depend on how regulators approach this new asset class.
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