Honduras Bans Financial Institutions From Dealing With Crypto

Crypto assets are prohibited in Honduras. (Photo; Doc. Analytic Insight)

JAKARTA - Honduras, one of the countries in Central America, has issued a ban on financial institutions to deal with crypto assets, such as bitcoin and ethereum. The ban was announced by the Honduran National Banking and Insurance Commission (CNBS), which is the supervisory authority of the financial sector in the country.

According to local media reports, CNBS issued an official statement on February 17, 2024, explaining the extent and reasons for the ban. The statement states that bitcoin is an unregulated "electronal money", which is born from a decentralized network without restrictions or borders.

CNBS says that bitcoin and other crypto assets have no intrinsic value, are not supported by the monetary authority, and have high volatility and risk. CNBS also says that cryptocurrencies can be used for illegal activities, such as money laundering, terrorism financing, and tax evasion.

Therefore, CNBS decided to ban financial institutions, such as banks, non-bank financial institutions, insurance companies, and securities companies, to act as intermediaries, advisors, or service providers for operations with crypto. CNBS also prohibits financial institutions from storing crypto as part of their cash or even instruments whose value depends on the performance of these assets.

CNBS says that the ban aims to protect the public interest, maintain financial system stability, and prevent money laundering and terrorism financing. CNBS also said that the ban was in accordance with recommendations from the FATF, which has issued guidelines for its member states on how to regulate the crypto sector.

The ban places Honduras as one of the world's most hostile crypto countries, along with countries such as Bolivia, Ecuador, and Algeria, which also prohibits the use of crypto as a whole. However, this ban does not mean that crypto is illegal in Honduras, as there is no law governing or banning it explicitly.