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Honduras and Guatemala are researching central bank digital currencies and the value they can add to their respective monetary systems.
Honduras and Guatemala, two Central American countries, are following in the footsteps of their shared neighbour in adopting Bitcoin (BTC), but in very different ways.
Instead of embracing an existing cryptocurrency as a legal tender, like what El Salvador did, the central banks of Honduras and Guatemala are currently studying central bank digital currencies (CBDC).
Following the approval of the board of directors, the Central Bank of Honduras kicked off a study “to determine the feasibility of conducting a pilot test issuing its own digital money or a central bank digital currency,” according to Honduras central bank president Wilfredo Cerrato’s remarks at a forum event in Tegucigalpa.
He said that the Central American Monetary Council, or Consejo Monetario Centroamericano, the highest monetary authority in the region, should address the adoption of digital currencies.
In the northwestern corner of the region, the CBDC even has a name. Banco de Guatemala vice president José Alfredo Blanco said the digital currency — iQuetzal — would be named after the national bird of Guatemala, just like its fiat currency.
However, central banks are hesitant to introduce a new type of currency into their existing financial system without first preparing for it. Blanco emphasised that the committee to work on a central bank digital currency was constituted only six months ago, and that the study phase will take a long time to finish.
Central bank digital currencies are gaining popularity and attention in countries all over the world. The eNaira, Nigeria’s CBDC, is expected to open on October 1, the country’s 61st Independence Day. The Ukrainian government is likewise going forwards with its CBDC plans by delegating authority to the National Bank of Ukraine to issue digital currency.