Following El Salvador’s Bitcoin debut, Honduras and Guatemala, two Central American countries, are studying central bank digital currencies and the value they could bring to their respective monetary systems.
Rather than adopting an existing cryptocurrency as legal money, as El Salvador did, Honduras and Guatemala’s central banks are now researching central bank digital currencies (CBDC).
According to Honduras central bank president Wilfredo Cerrato’s remarks at a forum event in Tegucigalpa, the Central Bank of Honduras started a study “to determine the feasibility of conducting a pilot test issuing its own digital money or a central bank digital currency” after the board of directors approved it.
He believes the Central American Monetary Council, or Consejo Monetario Centroamericano, the region’s highest monetary body, should handle digital currency adoption.
The CBDC is even given a name in the region’s northeastern section. Vice President José Alfredo Blanco of the Banco de Guatemala stated the digital money, dubbed iQuetzal, would be named after Guatemala’s national bird, just like the country’s fiat currency.
Central banks, on the other hand, are hesitant to introduce a new type of currency into their existing financial system without first preparing for it.
Blanco emphasized that the group to develop a central bank digital currency was founded only six months ago and that the inquiry phase will take a long time to finish.
Digital currencies issued by central banks are increasing popularity and interest in countries all over the world. The eNaira, Nigeria’s CBDC, is expected to debut on Oct. 1, the country’s 61st Independence Day.
The Ukrainian government is likewise pressing forward with its CBDC plans, granting authorization to the National Bank of Ukraine to issue a digital currency.