The National Banking and Securities Commission (CNBS) of Honduras, the country's financial regulatory authority, has imposed a prohibition on the handling of cryptocurrencies by financial institutions within the nation. This decision arises from the lack of regulation surrounding cryptocurrencies, highlighting that the Honduran central bank cannot provide assurances for crypto transactions due to their unregulated nature.

The announcement elaborated that individuals engaging in transactions involving cryptocurrencies and other blockchain-based financial services may be exposed to risks such as fraud, legal issues, and operational challenges. Moreover, since cryptocurrencies are not legally recognized as a form of payment, sudden non-acceptance could occur. Additionally, the ban was justified by cautioning that the unregulated nature of crypto assets could be exploited for fraudulent activities, money laundering, and even financing terrorism.

The CNBS specified the ban's terms by prohibiting registered financial institutions from engaging in any activities related to cryptocurrencies, crypto assets, virtual currencies, and similar virtual assets. They are also prohibited from maintaining derivatives based on crypto assets. Financial education programs have been urged to address the potential risks associated with crypto assets. However, cryptocurrency exchanges continue to operate freely in Honduras.

This resolution, unanimously passed on February 12 and published on February 15, is effective immediately. This action follows a warning issued by the Honduran central bank regarding cryptocurrency usage in March 2022, which coincided with news of the central bank's consideration of issuing its own digital currency.

Despite the crackdown on cryptocurrencies, Bitcoin has made some inroads in Honduras. The country is home to Bitcoin Valley, a tourist attraction that accepts payments in Bitcoin, U.S. dollars, or the Honduran lempira. Additionally, Honduras is the location of Próspera, a special economic zone city on Roatan island, where Bitcoin was declared legal tender in 2022 and designated as an accounting unit in January. The implications of the new CNBS resolution on these specific areas are still unclear.