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After El Salvador, Cuba is the second country to give recognition to cryptocurrencies. The government of Cuba will regulate cryptocurrencies for payments on the island. The popularity of cryptocurrencies has grown among the technologically savvy people group in Cuba.
The government of Cuba will recognize and regulate cryptocurrencies for payments on the island. A resolution has been published in the Official Gazette that said that the rules will be formed by the Central Bank for cryptocurrencies. The bank will also determine how to license providers of related services within Cuba.
The popularity of cryptocurrencies has grown among a technologically savvy group in Cuba. The dollar has become harder to use in some parts because of the toughened embargo rules imposed under former President Donald Trump.
El Salvador, the Central American nation, has recently given the status of legal currency bitcoin as a way to encourage remittances from its citizens living abroad. Coins can rise and fall in value dramatically. These currencies are not controlled by the central bank and use widely distributed blockchain computer codes to keep track of transfers.
Cryptocurrencies for long-distance transaction
Cryptocurrencies are also used for long-distance transactions that are anonymous. They are often popular with people trying to evade government regulations, including possibly in the United States. It was to restrict sending money to places like Cuba.
As per the resolution, Central Bank can authorize the use of cryptocurrencies. This is because of the reasons of socio-economic interest. However, the state has assured that its operations are controlled by the government. It should also be noted that the activity cannot be associated with illegal activity.
According to local cryptography expert and programmer Erich Garcia, some Cubans have used these devices, often with gift cards, to shop online.
El Salvador embracing crypto
President Nayib Bukele put his vision forward and said that he wants to help entrepreneurs embrace El Salvador as a base and make bitcoin free from capital gains tax. In many countries, any income incurred via bitcoin is taxable to a certain amount confirmed by the country. The percentage of the tax varies from country to country.
Latin America has been very receptive to bitcoin and making several moves to help the traders to evade taxes. Paraguay has been following the suit of El Salvador. The country is announcing many decisions via tweets for publicizing still unofficial government plans.