News reports have revealed that the Central Bank of Honduras BCH has recently decided to commence the development of a central bank digital currency for the country. The news was announced by the bank on X, initially known as Twitter.
According to the report, the Honduran apex bank has decided to jump on the trendy train of central bank digital currency (CBDC) as it launched the commencement of the pilot studies for the course. In addition, the bank also opened a public consultation concerning the development.
Furthermore, reports revealed that the new development is part of the apex bank to remodel its financial system to a modern form as well as to address the existing issues in the current payment system.
In addition, the report showed that the announcement about the Honduras Central Bank starting the pilot program for its proposed digital coin first surfaced on X social platform, otherwise known as Twitter. Additionally, the bank has extended invitations to interested experts, sectors, and the public to give feedback, reviews, insights, and comments on the latest development.
Furthermore, the report revealed that interested participants could only access the open consultation via the BCH website, as stated when the bank proposed new payment methods to the MIF panel (International Monetary Fund). This platform reportedly allows public and private financial sector delegates to converge and formally have innovative discussions on the topic.
BCH Plans To Amend Some Financial System Regulations
According to the report, the newly launched CBDC pilot program centers on the future of payments and money in Honduras and the following route. Also, the program was cautiously designed by technical experts from the IMF.
The pilot document reviewed the possible alternatives for financial systems that can be enforced in Honduras, which would be in line with the standards of the IMF as well as corroborate the IMF’s efforts to ensure the use of CBDCs is propagated all over Latin America.
At the core of the study’s goal is the quest to explore possible solutions that can solve problems of financial inclusion, delays in international transactions, interoperability, and other issues facing the Honduras financial system.
And to provide an answer to the quest for a solution, the country’s apex bank has decided to introduce the central bank digital currency as the most suitable solution. Furthermore, the report showed that the Bank for International Settlements supports the approach, as it stated that digital currency issued by central banks is the future of the monetary system.
In addition, the BCH proposed some amendments to the Monetary and Central Banks regulations as part of the process for its CBDC design. The bank claimed that the amendments would help to implement the regulatory framework needed to support the launching of the digital currency.
Honduras Central Bank Rules Out Cryptocurrency
Furthermore, the bank revealed that the proposed changes would be reformed by the feedback obtained from the open consultation, and afterward, it would pass through a comprehensive national deliberation before it would be approved.
While examining the core and properties of the proposed payment system alternatives, the central bank of Honduras is also taking a side study into cryptocurrencies, comparing them to CBDCs as potential payment options.
According to its study, the bank reported that cryptocurrency is plagued with a lack of efficiency, accountability, and stability, alongside slow transaction speeds and exorbitant transaction fees, which makes it unfit as a viable solution to the monetary system. Hence, the apex bank reaffirms its negative stance concerning cryptos.
Nonetheless, the bank admitted that some particular concept of cryptocurrency might be integrated into the financial system. This aligns with the trendy approach many nations took to create their CBDCs by leveraging the strengths of crypto but Maintaining centralized oversight, unlike crypto nature.
Meanwhile, the adoption of Bitcoin and other crypto assets continues to proliferate in Honduras as many startups and individuals now use it daily. In fact, Prospera on Roatan Island has
reportedly adopted Bitcoin as its legal tender. This showed that the crypto industry continues to grow in Honduras despite the government’s stance against it.