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Central Bank of Honduras urges caution when dealing with digital assets

Friday 5 August 2022 13:33 CET | News

The Central Bank of Honduras has warned citizens about the risks of carrying out transactions using crypto assets.

According to a press release issued by the bank in July 2022, the entity has become aware that Hondurans are now using digital assets as a form of payment. Since Honduras doesn’t regulate crypto assets, the bank has released a statement that warns citizens about the volatile nature of the market.

In the same press release, officials from the Central Bank of Honduras highlighted that digital assets are not supported by the laws of the country. As such, any Honduran that carries out a transaction using these assets bears all the responsibility and risk associated with it.

The bank also emphasized that Honduras’ digital asset policy should not be compared to other countries. The Central American country has neither adopted, restricted nor regulated this market. According to Honduran law, the BCH is the only issuer of legal tender coins and bills, and regulator of the payments system.

 

The Central Bank of Honduras has warned citizens about the risks of carrying out transactions using crypto assets.

 

Latin America continues to embrace cryptocurrencies

Reuters has recently reported on a project named Bitcoin Valley in Santa Lucia, which is a Honduran tourist hotspot. In a bid to attract more tourists, 60 local businesses have agreed to accept cryptocurrencies as payment following a training period. The project involves both small and large businesses.

The initiative was spearheaded by the Blockchain Honduras organization in partnership with Guatemalan cryptocurrency exchange Coincaex and the Technological University of Honduras.

In Argentina, Binance and Mastercard have recently launched a prepaid card that supports both Bitcoin and BNB. The card allows local residents to make daily purchases and pay their bills using cryptocurrencies.

In El Salvador, the El Zonte Bitcoin Beach has accepted Bitcoin as a form of payment even before the country made Bitcoin legal tender. Since then, according to coingeek.com, other Latin American countries such as Argentina, Panama, and Brazil have started to explore the regulation of digital assets.

However, according to cnbc.com, El Salvador’s economy is struggling in the context of the latest crypto crash. CNBC and other financial experts from CNN, Mashable, or Coindesk, argue that the government’s investment in Bitcoin has not paid off, quite the opposite, as Bitcoin adaptation nationwide isn’t making good progress.

The government of El Salvador has an unrealised paper loss on Bitcoin of around USD 50 million, which represents less than 0.5% of the national budget according to the El Salvadorian finance minister. However, whether the experiment has been successful as per local government officials’ estimation is a matter still up for debate.

This turn of events all takes place in the context where, according to EuroNews, Argentina, Paraguay, Brazil and Panama have all endorsed similar initiatives and started taken steps towards considering crypto as a legal tender.


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Keywords: digital assets, cryptocurrency, central bank, trade finance
Categories: DeFi & Crypto & Web3
Companies: Central Bank of Honduras
Countries: Honduras
This article is part of category

DeFi & Crypto & Web3

Central Bank of Honduras

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