Bitcoin 'Unregulated' - Honduran Central Bank Denies Fiat Rumors

The Central Bank of Honduras (BCH) has responded to rumors that the country may adopt Bitcoin as legal tender like its neighbor El Salvador, and the answer appears to be no.

The central bank of Honduras said in a statement on Wednesday that "for the time being" bitcoin (BTC) is not regulated in the country and is not considered legal tender in many other countries. BCH reaffirmed its authority under the Honduran constitution that it is the only authorized “issuer of banknotes and coins” in the country to be considered legal tender.

“BCH does not monitor or guarantee operations involving cryptocurrencies as a means of payment,” the central bank said in a translated statement. "Any transactions using these types of virtual assets are the responsibility and risk of the trader."

BCH added that it is continuing to study the feasibility of introducing a central bank digital currency (CBDC) in Honduras “through conceptual, technical and legal analysis.” BCH stated that the CBDC will be considered legal tender in the country and be regulated accordingly.

Several news sources reported this week that Honduran President Chiomara Castro is considering recognizing BTC as legal tender. El Salvador, which borders Honduras, adopted crypto assets as legal tender in September 2021, has since planned to build a $1 billion "Bitcoin City" with crypto mining operations powered by geothermal energy from El Salvador's volcanoes.

Other countries have also been trying to follow El Salvador's example in adopting cryptocurrencies. In February, a Mexican senator said she plans to introduce a bill to the Mexican Congress in 2022 proposing BTC to become legal tender — a bill modeled on El Salvador’s bitcoin law. A lawmaker from Tonga, an island nation 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.