A lot of people had their bets on Honduras being the next country to declare bitcoin legal tender. Apparently, they lost. The country’s Central Bank issued an official statement in which they affirm their authority as the “sole issuer of legal tender banknotes and coins.” They also announce their intention of going the CBDC route and issuing their own digital currency. The exact opposite of bitcoin adoption.
🇭🇳 Honduran president Xiomara Castro is expected to declare #bitcoin legal tender in the country.
“We must not allow El Salvador to be the only country escaping dollar hegemony. Honduras has the right to move towards the First World countries.”
~ President Castro pic.twitter.com/16sOmdTJie
— Bitcoin LightningNetwork+ (@BTC_LN) March 21, 2022
It’s worth noting this is the Honduras Central Bank’s official position, and not the government’s. The Executive Power is yet to issue an opinion on the subject. In late January, Xiomara Castro took the oath and became the first Honduras President to be a woman. Since her administration is now in power, people expected change. Is the door still open for bitcoin as legal tender in Honduras?
Let’s read some choice quotes from the Central Bank’s text. It contains a few surprises.
What Does The Honduras Central Bank Think About Bitcoin?
First, they define bitcoin and clarify that “at the moment is not regulated in our country and in most countries doesn’t have the condition of legal tender.” Notice the “at the moment.” Then, the organization defends its authority. “The BCH is the sole issuer of legal tender banknotes and coins in the national territory. Likewise, Article 1 of the Monetary Law indicates that the monetary unit of Honduras is the Lempira.”
Yes, the acronym for the Banco Central de Honduras is BCH.
— Banco Central de Honduras (@BancoCentral_HN) March 23, 2022
This is where it gets interesting. The organization reiterates that “the BCH does not supervise or guarantee operations carried out with cryptocurrencies as means of payment in the national territory. Any transaction carried out with this type of virtual assets is under the responsibility and risk of those who do it.” So, using bitcoin in Honduras is officially not against the law. Which is good to know.
It’s happening… pic.twitter.com/9RvtblXfoK
— MAX💙🇸🇻 (@maxkeiser) March 18, 2022
Then, it gets ugly. They had to break our hearts somehow. The Honduras Central Bank “continues with conceptual, technical, and legal study and analysis to determine the feasibility of issuing a central bank digital currency (CBDC) that will be recognized as legal tender in the country and therefore be regulated and have the support of the BCH.” So, they want control. Total control.
BTC price chart for 03/24/2022 on FX | Source: BTC/USD on TradingView.com
What Does The Twitterati Think About An Honduras CBDC?
A few weeks back, Samson Mow quit his job as Chief Strategy Officer at Blockstream to focus on nationwide bitcoin adoption. At the time, Bitcoinist reported:
“Apparently, the bitcoin nation-state adoption business was too good to pass. “With everything happening at light speed in El Salvador, and more and more countries interested in adopting Bitcoin, I found my time each day just no longer enough anymore,” Samson Mow tweeted in his goodbye thread.”
Since then, speculation about which country is he working with has been rampant. Playing with the situation, Mow’s Twitter became speculation fuel. Several countries have come up in his posts, including Honduras. Adding fuel to the fire, Max Keiser, who said he knows which country will declare bitcoin legal tender next, tweeted Hondura’s flag. “It’s happening…” he added.
I don’t think Honduras is going to make a #Bitcoin announcement this week. I’d love to be wrong though.
— Samson Mow (@Excellion) March 22, 2022
Earlier in the week, Samson Mow predicted, “I don’t think Honduras is going to make a Bitcoin announcement this week. I’d love to be wrong though.” He was wrong. After the Central Bank’s announcement, Mow tweeted “No Bitcoin legal tender in Honduras for now.”
Honduras appears to be taking a pass on Bitcoin, and is instead going the Central Bank Digital Currency route.
Choosing monetary control over monetary freedom.
This is the likely move for most governments, and underscores how exceptional BTC adoption in El Salvador really is https://t.co/4THd0C5NUp
— Alex Gladstein 🌋 ⚡ (@gladstein) March 23, 2022
For his part, the Human Rights Foundation’s Alex Gladstein went deeper. “Honduras appears to be taking a pass on Bitcoin, and is instead going the Central Bank Digital Currency route. Choosing monetary control over monetary freedom. This is the likely move for most governments, and underscores how exceptional BTC adoption in El Salvador really is.”
It does underscore that. However, a second country is on the horizon and everyone can feel it. Will they announce it at the Bitcoin 2022 conference? Is this a decoy? Will Honduras surprise the world and make the announcement? It may very well be.
Keep your eye glued to Bitcoinist to find out for sure.
Featured Image by Héctor Emilio Gonzalez on Unsplash | Charts by TradingView