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Central Bank of Honduras Reaffirms Position on Digital Assets as Cryptocurrency Grows in LatAm

The Central Bank of Honduras (also Banco Central de Honduras – BCH) has warned Hondurans about the risks of digital assets based on their lack of legal backing in the country and high volatility.

In a press release dated July 29, the BCH stated that it has become aware that digital assets are now being used as payment. Honduran law is clear that the only issuer of legal tender coins and bills, and regulator of the payments system is the BCH, the notice said.

The BCH also reminded the populace of its previous notices concerning digital assets and the fact that they are not regulated or backed by law. Based on this, the central bank emphasised that citizens who transact with digital assets will bear responsibility for any risks they face from the high volatility of digital assets.

“In this sense, the BCH reiterates to the Honduran population that, since crypto assets are not supported by the laws of the country, any transaction carried out with them will be under the responsibility and risk of the person who carries it out,” the BCH wrote.

It added that Honduras’ policy on digital assets should not be compared to other countries that have either restricted, adopted or regulated the market.

Earlier this year, the BCH debunked social media rumors that Honduras was set to follow in the footsteps of El Salvador and make Bitcoin legal tender, following a  rumour that the president had declared a change. The bank maintained that it is the only entity that can issue legal tenders, and as far as it was concerned, only the Honduran lempira is the currency in the country. One factor that led to the belief Honduras may be making this crypto-friendly move, was due to Prospera, a crypto-economic zone in Honduras. It adopted bitcoin as legal tender, allowing its citizens to pay taxes with BTC, and exempting them from paying capital gains tax on its use.

Digital assets adoption continues to sweep Latin America

Meanwhile, the publication of the latest release coincides with the launch of “Bitcoin Valley” in the Honduran tourist town of Santa Lucia. According to a Reuters report, the initiative will see both big and small businesses in the town get training and resources to enable them to accept Bitcoin as payment.

This is in a bid to attract more tourists and business. The project, which initially targets 60 enterprises, is jointly developed by the Blockchain Honduras organisation, the Guatemalan digital currency exchange consortium Coincaex, the Technological University of Honduras, and Santa Lucia’s municipality.

The initiative is similar to El Salvador’s Bitcoin Beach in El Zonte, where Bitcoin has already been accepted as payment before the country-wide adoption of the digital asset as legal tender.

Binance and Mastercard launch prepaid crypto card in Argentina

Since El Salvador made Bitcoin legal tender, several other Latin American countries, like Brazil, Argentina and Panama, have been giving digital assets regulations serious consideration. While the Central Bank of Argentina does not recognise cryptocurrencies as legal tender yet, in an attempt to bridge the gap between cryptocurrencies and everyday purchases, Mastercard and Binance have launched Binance Card in the country. The Binance Card is part of the company’s ongoing efforts towards furthering global cryptocurrency adoption in a tangible manner. The product is in beta phase and will be widely available in the coming weeks.

The Binance Card issued by Credencial Payments will allow all new and existing Binance users in Argentina with a valid national ID to make purchases and pay bills with cryptocurrencies, including Bitcoin and BNB, at over 90 million Mastercard merchants worldwide, both in-store and online. Users can enjoy a seamless transaction in which their cryptocurrencies are converted to fiat currency in real-time at the point of purchase, as well as earn up to eight per cent in crypto cashback on eligible purchases and enjoy zero fees (bar third party services) on ATM withdrawals.

Binance cardholders will be able to manage their cards through the card dashboard on the Binance App and website. Users will also be able to view their transaction history and access customer support via the card dashboard.

“Our work with digital currencies builds on our strong foundation to enable choice and peace of mind when people shop and pay. Together with our partners, Mastercard has been leading the payments industry in enabling entry to this exciting new world, helping bring millions of additional users into crypto and other digital assets in a safe and trusted manner”, said Walter Pimenta, executive vice president, products and innovation, Mastercard Latin America and the Caribbean.

“Payments is one of the first and most obvious use cases for crypto, yet adoption has a lot of room to grow. By using the Binance Card, merchants continue to receive fiat and the users pay in cryptocurrency they choose. We believe the Binance Card is a significant step in encouraging wider crypto use and global adoption and now it is available for users from Argentina“, said Maximiliano Hinz, general director of Binance in Latin America.

Author

  • Francis is a journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

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