3D Illustration of waving Bitcoin and Honduras flag.

‘We’ll not be making BTC legal tender’: Honduras central bank debunks rumors

Honduras will not be joining its neighbor El Salvador to make BTC legal tender, the country’s central bank has clarified following widespread rumors that the move was imminent.

The Banco Central de Honduras took to Twitter to state that it has no plans of making the digital currency a legal tender any time soon.

This came following rumors especially on social media platforms that the country would become the next in line to make the move after its neighbor El Salvador. Several people on Twitter claimed to have the inside scoop that President Xiomara Castro would be making the bold statement soon following in the steps of the fascist leader Nayib Bukele.

However, the Banco Central de Honduras clarified that it’s the only entity that can issue legal tender in Honduras and that as of now, the lempira is the only recognized legal tender in the Central American nation.

Further, the central bank reminded the public that digital currencies are not regulated in Honduras. Referencing two previous communiqués in 2020 and 2021, the bank stated that it does not “supervise or guarantee operations carried out with cryptocurrencies as means of payment in the national territory.

Despite being anti-BTC, the central bank spoke favorably on a central bank digital currency (CBDC). Just as with most other central banks, the Banco Central de Honduras has continued to study and conceptually, legally and technically analyze the feasibility of issuing its own CBDC. If it does issue state-backed digital currency, it would join the Caribbean nation of the Bahamas which issued its Sand Dollar CBDC in 2020, being the first nation in the world to make the move even as others like China continue to test their digital currencies.

El Salvador continues to be the only nation to recognize BTC as legal tender. President Bukele’s government has continued to face one blow after another for its move, even as he continues to tout the benefits of using BTC as legal tender (which according to him center on hodling and making a killing through speculation).

The latest is the postponement of a $1 billion BTC bond which the government intended to sell and raise money to build the ‘Bitcoin City,’ a city that would be based on BTC, including mining powered by Conchagua volcano’s geothermal energy.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

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