Honduras
Retail_Trading_Status
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- #684
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- 2025-12-12 04:23
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Executive Summary
Retail cryptocurrency trading in Honduras is permitted for individuals but faces significant restrictions within the formal financial sector. In February 2024, the National Banking and Insurance Commission (CNBS) issued a circular prohibiting all supervised financial institutions from maintaining, investing, intermediating, or operating with cryptocurrencies. While the Central Bank of Honduras (BCH) clarifies that individual possession and trading are not illegal, users operate without consumer protection and banks are barred from facilitating these transactions. A unique exception exists within the Próspera ZEDE (Zone for Employment and Economic Development), where Bitcoin is recognized as legal tender, creating a regulatory conflict with the national government.
Key Pillars
National Banking and Insurance Commission (CNBS) - Enforces the banking ban on crypto assets
Central Bank of Honduras (BCH) - Issues warnings and asserts the Lempira as the sole legal tender
Próspera ZEDE Regulator - Oversees the specific jurisdiction where Bitcoin is legal tender (though contested by the national government)
Financial Intelligence Unit (UIF) - Monitors for AML/CFT risks associated with virtual assets
Landmark Laws
Circular CNBS No. 003/2024 (Circular CNBS No. 003/2024) - Enacted: 2024-02-12
- Prohibits all supervised financial institutions (banks, insurers, financiers) from maintaining, investing, intermediating, or operating with cryptocurrencies, tokens, or virtual assets not authorized by the Central Bank. It also mandates that these institutions educate users on the risks of crypto.
- Source
BCH Press Release on Crypto Assets (Comunicado BCH No. 003/2022) - Enacted: 2022-03-23
- Reaffirms that the Central Bank is the sole issuer of banknotes and coins, and that crypto assets are not regulated or guaranteed by the state. It explicitly states that Próspera ZEDE's adoption of Bitcoin does not alter the national monetary framework.
- Source
Organic Law of the Zones for Employment and Economic Development (ZEDE Law) (Decree No. 120-2013 (Repealed but legally contested)) - Enacted: 2013-09-06
- Established the legal framework for ZEDEs like Próspera. While the current administration repealed this law in 2022, Próspera continues to operate under grandfathering clauses and international treaty protections, maintaining Bitcoin as legal tender within its zone.
Considerations
Banking Blockade: Local banks are strictly prohibited from processing crypto-related transactions, forcing users to rely on P2P markets or foreign payment methods.
Jurisdictional Conflict: The Próspera ZEDE on Roatán island accepts Bitcoin as legal tender and a unit of account, directly contradicting the national government's stance. This creates a dual-reality legal environment.
Lack of Consumer Protection: The state explicitly disavows any responsibility for losses in crypto trading, and no deposit insurance covers these assets.
AML Risks: The CNBS cites money laundering and terrorism financing as the primary reasons for the banking ban.
Notes
The situation in Honduras is highly polarized between the national government's restrictive stance (banking ban) and the Próspera ZEDE's libertine approach (Bitcoin as legal tender). Investors should be aware that protections in Próspera may not be recognized by the central government in Tegucigalpa.
Remaining Uncertainties
- The outcome of the legal battle between Próspera ZEDE and the Honduran government regarding the repeal of the ZEDE law.
- Whether the CNBS will expand the ban to explicitly criminalize P2P trading in the future.
- How strictly banks are enforcing the ban on individual accounts suspected of P2P trading (e.g., account closures).
Detailed Explanation
Detailed Explanation
Honduras operates in a regulatory gray-zone for cryptocurrency, characterized by a national prohibition on financial sector involvement alongside a unique, conflicting jurisdiction that embraces Bitcoin. At the national level, retail trading is permitted for individuals but is severely constrained by a formal banking blockade. The pivotal regulation is Circular CNBS No. 003/2024, enacted on February 12, 2024, by the National Banking and Insurance Commission (CNBS), which prohibits all supervised financial institutions—including banks, insurers, and financiers—from maintaining, investing, intermediating, or operating with cryptocurrencies, tokens, or any virtual assets not authorized by the Central Bank of Honduras (BCH). This forces users to rely on peer-to-peer markets or foreign payment methods and operates without any state-backed consumer protection or deposit insurance, as explicitly clarified by the BCH in its press release (Comunicado BCH No. 003/2022) from March 23, 2022. The Central Bank consistently reaffirms the Lempira as the sole legal tender and warns that crypto assets are neither regulated nor guaranteed by the state. This restrictive national framework is directly challenged by the existence of the Próspera Zone for Employment and Economic Development (ZEDE) on Roatán island. Established under the now-repealed but contested Organic Law of the ZEDEs (Decree No. 120-2013 from September 6, 2013), Próspera operates with its own regulator and recognizes Bitcoin as legal tender, creating a stark jurisdictional conflict. The national government, via the BCH, asserts that Próspera's adoption does not alter the national monetary framework. Consequently, the environment is highly polarized: investors face significant AML risks and a lack of recourse nationally, while those operating within Próspera must navigate a legal duality where protections may not be recognized by the central government in Tegucigalpa.
Summary Points
I. Regulatory Status
* Gray-Zone: Retail cryptocurrency trading is permitted for individuals but faces severe restrictions within the formal financial sector.
* The national government maintains a restrictive stance, while the Próspera ZEDE jurisdiction operates under a conflicting, permissive framework.
II. Key Regulatory Bodies
* National Banking and Insurance Commission (CNBS): Enforces the banking ban on crypto assets and mandates risk education for users.
* Central Bank of Honduras (BCH): Asserts the Lempira as the sole legal tender, issues warnings on crypto assets, and clarifies they are not state-guaranteed.
* Próspera ZEDE Regulator: Oversees the specific jurisdiction where Bitcoin is recognized as legal tender, though this status is contested by the national government.
* Financial Intelligence Unit (UIF): Monitors for Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) risks associated with virtual assets.
III. Important Legislation
* Circular CNBS No. 003/2024 (Enacted: 2024-02-12)
* Prohibits all supervised financial institutions from maintaining, investing, intermediating, or operating with unauthorized cryptocurrencies.
* Mandates that these institutions educate their users on the risks associated with crypto assets.
* BCH Press Release on Crypto Assets (Comunicado BCH No. 003/2022) (Enacted: 2022-03-23)
* Reaffirms the BCH as the sole issuer of legal tender and states crypto assets are not regulated or guaranteed by the state.
* Explicitly declares that Próspera ZEDE's adoption of Bitcoin does not alter the national monetary framework.
* Organic Law of the Zones for Employment and Economic Development (ZEDE Law), Decree No. 120-2013 (Enacted: 2013-09-06, Repealed but legally contested)
* Established the legal framework for ZEDEs like Próspera, which continues to operate under grandfathering clauses and international treaty protections.
IV. Compliance Requirements
* For nationally supervised financial institutions: Strict prohibition on any involvement with cryptocurrencies as per Circular CNBS No. 003/2024.
* For these institutions: A requirement to educate their clients about the risks of dealing with crypto assets.
* For all participants: Adherence to general AML/CFT monitoring by the Financial Intelligence Unit (UIF).
V. Notable Restrictions or Limitations
* Banking Blockade: Local banks are strictly prohibited from processing any crypto-related transactions.
* Lack of Consumer Protection: The state explicitly disavows responsibility for losses, and no deposit insurance covers cryptocurrency holdings.
* Jurisdictional Conflict: A dual-reality legal environment exists due to Próspera ZEDE's recognition of Bitcoin as legal tender, which contradicts the national government's stance.
* Primary Regulatory Concern: The CNBS cites money laundering and terrorism financing as the key reasons for the banking ban.
VI. Recent Developments or Notes
* The CNBS banking ban (Circular CNBS No. 003/2024) is a very recent and significant hardening of the national stance, enacted in February 2024.
* The situation remains highly polarized between the national government and the Próspera ZEDE.
* Investors must be aware that legal protections and the status of Bitcoin within Próspera may not be recognized or enforced by the central Honduran government.
Full Analysis Report
Full Analysis Report
The regulatory status of cryptocurrency in Honduras is best classified as a 'Gray-Zone' due to the explicit prohibition on the banking sector facilitating crypto transactions, despite the absence of a law criminalizing individual possession. The defining regulatory action occurred in February 2024, when the National Banking and Insurance Commission (CNBS) issued Circular No. 003/2024. This directive ordered all supervised entities—including commercial banks and insurance companies—to cease all operations involving cryptocurrencies, tokens, and virtual assets. The regulator justified this move by citing the lack of supervision and the high risks of fraud and money laundering. Consequently, while a Honduran citizen can legally own Bitcoin, they cannot use their local bank account to buy it directly from an exchange.
The Central Bank of Honduras (BCH) has consistently maintained a defensive posture, issuing multiple warnings (most notably in 2018, 2022, and reiterated in 2024) that crypto assets are not legal tender and are not backed by the state. The BCH emphasizes that the Lempira is the only official currency. The government's approach is one of 'containment'—allowing private activity to exist at the user's own risk while severing the link between crypto and the formal financial system to protect monetary stability.
A major source of regulatory complexity is the existence of 'Próspera,' a Zone for Employment and Economic Development (ZEDE) located on the island of Roatán. Under a special legal regime granted by a previous administration, Próspera recognized Bitcoin as legal tender and a valid unit of account for tax and commercial purposes. The current Castro administration is hostile towards ZEDEs and repealed the enabling legislation in 2022. However, Próspera continues to operate under claimed legal protections (grandfathering and international treaties), creating a localized 'Allowed-Regulated' bubble within a national 'Gray-Zone' framework. This conflict has led to international arbitration and significant legal uncertainty regarding the long-term viability of this crypto-friendly jurisdiction.
Practically, this environment means that retail traders in mainland Honduras must operate outside the traditional banking rails, utilizing Peer-to-Peer (P2P) platforms or international payment processors that do not trigger local banking blocks. The CNBS circular specifically instructs institutions to monitor for and prevent the use of their platforms for crypto operations, suggesting that persistent traders risk account closure. Despite these hurdles, no law explicitly penalizes the individual for the act of trading, distinguishing Honduras from a 'Banned' jurisdiction.
The regulatory status of cryptocurrency in Honduras is best classified as a 'Gray-Zone' due to the explicit prohibition on the banking sector facilitating crypto transactions, despite the absence of a law criminalizing individual possession. The defining regulatory action occurred in February 2024, when the National Banking and Insurance Commission (CNBS) issued Circular No. 003/2024. This directive ordered all supervised entities—including commercial banks and insurance companies—to cease all operations involving cryptocurrencies, tokens, and virtual assets. The regulator justified this move by citing the lack of supervision and the high risks of fraud and money laundering. Consequently, while a Honduran citizen can legally own Bitcoin, they cannot use their local bank account to buy it directly from an exchange. The Central Bank of Honduras (BCH) has consistently maintained a defensive posture, issuing multiple warnings (most notably in 2018, 2022, and reiterated in 2024) that crypto assets are not legal tender and are not backed by the state. The BCH emphasizes that the Lempira is the only official currency. The government's approach is one of 'containment'—allowing private activity to exist at the user's own risk while severing the link between crypto and the formal financial system to protect monetary stability. A major source of regulatory complexity is the existence of 'Próspera,' a Zone for Employment and Economic Development (ZEDE) located on the island of Roatán. Under a special legal regime granted by a previous administration, Próspera recognized Bitcoin as legal tender and a valid unit of account for tax and commercial purposes. The current Castro administration is hostile towards ZEDEs and repealed the enabling legislation in 2022. However, Próspera continues to operate under claimed legal protections (grandfathering and international treaties), creating a localized 'Allowed-Regulated' bubble within a national 'Gray-Zone' framework. This conflict has led to international arbitration and significant legal uncertainty regarding the long-term viability of this crypto-friendly jurisdiction. Practically, this environment means that retail traders in mainland Honduras must operate outside the traditional banking rails, utilizing Peer-to-Peer (P2P) platforms or international payment processors that do not trigger local banking blocks. The CNBS circular specifically instructs institutions to monitor for and prevent the use of their platforms for crypto operations, suggesting that persistent traders risk account closure. Despite these hurdles, no law explicitly penalizes the individual for the act of trading, distinguishing Honduras from a 'Banned' jurisdiction.
Source Evidence
Primary and secondary sources cited in this analysis
"Prohibir a las instituciones supervisadas... mantener, invertir, intermediar u operar con criptomonedas, criptoactivos, monedas virtuales, tokens o cualquier otro activo virtual similar."
"El BCH no supervisa ni garantiza las operaciones efectuadas con criptomonedas como medios de pago... Cualquier transacción efectuada con este tipo de activos virtuales será bajo la responsabilidad y riesgo de quien la realice."
"Próspera ZEDE officially recognizes Bitcoin as a unit of account... meaning it can now be used to measure the market value of goods and services."
"The National Banking and Securities Commission of Honduras (CNBS) has issued a resolution banning the country's financial institutions from handling crypto."
"Prospera's flexible regulatory framework enables crypto-innovation and the use of Bitcoin by residents, businesses, and governments."
Web Sources (12)
Sources discovered via web search grounding
Search queries used (5)
- CNBS Honduras prohibición criptomonedas circular
- Honduras crypto trading legality 2024
- Honduras regulatory status retail crypto trading
- Próspera ZEDE bitcoin legal status current
- Banco Central de Honduras criptomonedas comunicado 2024
https://gfmag.com/economics-policy-regulation/honduras-cryptocurrencies-banned/
https://www.bitget.com/news/detail/12560603905958
https://consortiumlegal.com/en/2025/04/04/investment-in-cryptoassets-and-cryptocurrencies-in-honduras/
https://decrypt.co/es/218140/honduras-prohibe-las-criptomonedas-en-la-banca-por-que
https://www.laprensa.hn/honduras/honduras-cnbs-prohibe-bancos-invertir-operar-criptos-JK17596593
https://m.economictimes.com/tech/technology/honduras-watchdog-bans-institutions-from-trading-crypto/articleshow/107769261.cms
https://freemanlaw.com/cryptocurrency/honduras/
https://www.binance.com/en/square/post/2024-02-18-4278385637217
https://lexincorp.com/en/current-situation-of-cryptocurrencies-in-honduras/
https://www.elheraldo.hn/economia/cnbs-prohibe-operacion-inversion-criptomonedas-honduras-GK17596321
https://lexincorp.com/situacion-actual-de-las-criptomonedas-en-honduras/
https://circulares.cnbs.gob.hn/Archivo/Viewer/3611/003-2024%20REFERENTE%20ACTIVOS%20VIRTUALES.pdf