The Honduras financial regulator has slammed the brakes on cryptocurrencies, with the National Banking and Securities Commission (CNBS) prohibiting banks under its supervision from dealing in cryptos.

The CNBS has stated that the “maintaining, investing, intermediating or operating with cryptocurrencies, crypto assets, virtual currencies, tokens or any other similar virtual asset” will not be allowed for the country’s financial institutions.

Citing the unregulated nature of crypto and potential exposure to fraud, money laundering, and terrorism financing, the CNBS resolution effectively bars banks, investment firms, and other financial institutions from engaging in any activities related to cryptocurrencies, including holding, investing, or facilitating transactions.

See Also: This Is How Chinese Crypto Traders Have Been Bypassing The Crypto Ban

Honduras is home to several crypto-friendly initiatives, including Bitcoin Valley and the special economic zone of Próspera, where Bitcoin serves as legal tender. 

However, the central bank of Honduras had previously warned against using crypto and is studying the issuance of its own digital currency. 

While crypto exchanges continue to operate freely in Honduras, mainstream financial institutions are now prohibited from entering the digital asset space.

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