Crypto

Honduras‘ central bank pushes back against legal tender rumors

The Central Bank of Honduras, or BCH, addressed rumors regarding the country potentially adopting Bitcoin (BTC) as legal tender like its neighbor El Salvador — and the answer seems to be negative.

In a Wednesday statement, Honduras‘ central bank said that “for the time being,” Bitcoin was not regulated in the country and not recognized as legal tender in many others. The BCH reiterated its authority under Honduras‘ constitution that it was the only authorized “issuer of banknotes and legal tender” in the country.

“BCH neither supervises nor guarantees operations carried out with cryptocurrencies as means of payment,” according to the central bank. “Any transaction conducted with these types of virtual assets is the responsibility and risk of those who carry it out.”

The central bank added it was continuing with “the study and conceptual, technical and legal analysis” of the feasibility of introducing a central bank digital currency, or CBDC, in Honduras. The BCH said a CBDC would be considered legal tender in the country and regulated accordingly.

Related: As Bitcoin debuts in El Salvador, Honduras and Guatemala study CBDCs

Several news sources reported this week that Honduran President Xiomara Castro was considering recognizing BTC as legal tender. El Salvador, which borders Honduras to the west, adopted the crypto asset as legal tender in September 2021 and has since planned to construct a $1-billion “Bitcoin City” with crypto mining operations powered by geothermal energy from the country’s volcanoes.

Other countries have also been making pushes to follow El Salvador’s example in adopting crypto. In February, a Mexican senator said she planned to introduce a bill to the country’s congress in 2022 proposing BTC become legal tender — the bill being modeled after El Salvador’s Bitcoin Law. A lawmaker from the island nation of Tonga, more than 10,000 kilometers from Honduras, is also working on legislation that could see the country recognize cryptocurrencies as legal tender by mid-2023.