Honduras

**Report: Retail Cryptocurrency Trading Status in Honduras**

**Date:** April 12, 2025

**Topic:** Retail_Trading_Status

**Description:** Assessment of the legal permissibility for individual citizens and residents in Honduras to buy, sell, and hold cryptocurrencies, including the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

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**1. Current Status:** `Gray-Zone`

**2. Detailed Narrative Explanation:**

The status of retail cryptocurrency trading in Honduras is best described as `Restricted`. While there is no specific law explicitly banning individual citizens from owning, buying, or selling cryptocurrencies directly (e.g., peer-to-peer), significant regulatory actions and official warnings severely limit the practical ability to engage with these assets, particularly through the formal financial system.

Historically, Honduras has lacked specific legislation governing cryptocurrencies and virtual assets [3, 4, 19]. The Central Bank of Honduras (Banco Central de Honduras - BCH) has consistently maintained a cautionary stance since at least 2018, issuing multiple statements clarifying that cryptocurrencies are not legal tender in Honduras, are not backed by the BCH, are not regulated, and any transactions involving them are undertaken entirely at the user's own risk [3, 7, 15]. The BCH has highlighted the volatility and potential for illicit use associated with crypto assets [7].

A major development occurred in February 2024 when the National Banking and Insurance Commission (Comisión Nacional de Bancos y Seguros - CNBS), the country's financial regulator, issued a resolution with immediate effect prohibiting all institutions under its supervision (including banks, investment firms, etc.) from engaging in activities related to cryptocurrencies [2, 4, 6, 19]. This ban explicitly forbids these financial institutions from "maintaining, investing, intermediating or operating with cryptocurrencies, crypto assets, virtual currencies, tokens or any other similar virtual asset not issued or authorized by the central bank" [6, 19, 21].

The CNBS cited the risks of fraud, money laundering, and terrorist financing, as well as the lack of regulation and consumer protection, as justifications for this measure [2, 4, 19]. The resolution also mandated that supervised institutions include warnings about crypto risks in their financial education programs [20].

This prohibition on financial institutions significantly restricts the ability of retail users to interact with the cryptocurrency market. It effectively cuts off the main regulated on-ramps and off-ramps for converting Honduran Lempira (HNL) to cryptocurrency and vice-versa through the domestic banking system. While some sources note that crypto exchanges might still operate within the country [2, 6, 20] and some international platforms may offer services [24, 25], accessing these platforms and moving funds between them and the traditional Honduran financial system is now severely hampered. Notably, major platforms like Binance have stated they are unavailable in Honduras [5].

Despite the national stance, there are localized exceptions. The special economic zone (ZEDE) known as Próspera, located on the island of Roatán, adopted Bitcoin as legal tender and a unit of account within its jurisdiction in 2022 and further solidified this in early 2024 [2, 11, 12, 14, 16, 22]. However, the precise impact of the CNBS's nationwide ban on financial institutions regarding Próspera's operations remains somewhat unclear [19, 21]. Another initiative, "Bitcoin Valley" in Santa Lucia, aimed to promote local crypto payments [2, 17], though this operates against the backdrop of the BCH's warnings.

In summary, while individual possession or peer-to-peer trading might not be explicitly illegal under a specific statute, the Honduran government, through the Central Bank's warnings and the CNBS's ban on financial sector involvement, has created a highly restrictive environment for retail cryptocurrency trading. The lack of regulation, absence of legal tender status, strong official discouragement, and the severing of links with the formal financial system justify the 'Restricted' status.

**3. Specific Relevant Text Excerpts:**

*   **On the CNBS Ban (February 2024):** "Honduras' CNBS regulator has banned the central American country's financial system from trading in cryptocurrency and similar virtual assets, it said in a resolution, citing risks of fraud and money laundering... The resolution bans institutions under its supervision to 'maintain, invest, intermediate or trade in cyptocurrencies, crypto-assets, virtual currencies, tokens, or any similar virtual assets not issued or authorized by the central bank.'" (Source: Reuters, cited in BFSI News [19] & The Economic Times [21])
*   **On the Scope of the Ban:** "The blanket ban applies to all institutions supervised by the CNBS. It prohibits the maintenance, investing, intermediating or operating of cryptocurrencies, crypto assets, virtual currencies, tokens or similar virtual assets unless it was issued or authorized by the central bank." (Source: Global Finance Magazine [2])
*   **On Lack of Specific Regulation for Crypto Assets:** "Honduran law does not currently regulate crypto assets, though platforms trading in them do operate in the country. The watchdog noted that as many of these platforms are domiciled in multiple jurisdictions, Honduran law cannot control them..." (Source: Reuters, cited in BFSI News [19]) / "In Honduran legislation, there is no specific regulation on cryptocurrencies, virtual currencies or any financial service based on blockchain technology..." (Source: CNBS statement, cited in BeInCrypto [4])
*   **On Central Bank (BCH) Stance (July 2022):** "...this Institution emphasizes that cryptoassets do not have backing, therefore they are not regulated nor is their use guaranteed, consequently, they do not enjoy the protection granted by national laws... the BCH reiterates to the Honduran population that, as cryptoassets are not backed by the laws of the country, any transaction carried out with them will be under the responsibility