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Honduras tightens cryptocurrency regulations, banning bank and holding company transactions.

For the crypto community, this could pose a challenge, placing restrictions on the use of cryptocurrencies as a means of payment and investment.

Date: 2024-02-19 Author: Marek Stiller
Honduras tightens cryptocurrency regulations, banning bank and holding company transactions.

The National Banking and Securities Commission of Honduras (CNBS) has made a decision that prohibits domestic financial institutions from participating in cryptocurrency activities. CNBS said that the Honduran central bank cannot guarantee cryptocurrency transactions due to the lack of regulation in this area.

The resolution highlights the risks associated with cryptocurrencies and blockchain-based financial services, including possible fraud, operational problems and possible legal issues. In addition, it stresses that there is a possibility that the acceptance of cryptocurrencies as a means of payment may come to an end because they are not legally accepted.

In addition, the resolution expressed concerns about the unregulated nature of crypto assets, which can be used for fraudulent schemes, money laundering and terrorist financing. Accordingly, CNBS ordered institutions under its supervision to refrain from holding, investing, brokering or conducting activities related to cryptocurrencies.

Supervised institutions are also prohibited from holding derivatives based on cryptocurrency assets. The resolution also stresses that financial education programs should include information about the risks associated with cryptocurrencies. It should be noted that the resolution does not affect Honduran cryptocurrency exchanges, which continue to operate without restrictions.

CNBS, part of the Honduran presidential administration, unanimously approved the resolution, which goes into effect on February 15, 2024. in March 2022. Honduras warned about the use of cryptocurrencies after reports that it may adopt Bitcoin (BTC) as legal tender, similar to El Salvador.

At the time, Honduras’ central bank expressed interest in conducting research into the possibility of issuing a digital currency. There was then some adoption of Bitcoin in Honduras, despite the lack of legislation.

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One of the most interesting developments is that the Próspera special economic zone on the island of Roatán has officially recognized Bitcoin as a unit of account, allowing it to be used to measure the market value of goods and services.

Jorge Colindres, Próspera’s manager and tax commissioner, is leading the initiative, which aims to increase financial and financial freedom for individuals and companies operating in the zone.

Despite the technological and regulatory challenges that currently prevent the implementation of the “Final BTC Tax Payment Procedure,” the zone has outlined how entities report tax liabilities in Bitcoin. For now, these liabilities are reported in US dollars or Honduran lempiras.

In addition, the greater Honduran community is using Bitcoin in various initiatives, such as the “Bitcoin Valley” in Santa Lucia. This project aims to turn Honduras into a regional hub for cryptocurrency investors by encouraging a wide range of businesses to accept Bitcoin as payment.

Bitcoin Valley seeks to capitalize on the growing interest in digital assets, following in the footsteps of neighboring El Salvador, which saw a significant increase in tourism and economic activity after adopting Bitcoin as legal tender.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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