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downloadThe government of Cuba has announced that it will recognize cryptocurrencies and regulate their use for payments on the Caribbean island.
Cuba recognizes cryptocurrencies
A resolution published in the Official Gazette states that the Banco Central de Cuba (BCC), the country’s central bank, will develop a set of rules for cryptocurrencies and define how to license related service providers in the Cuban market.
On the other hand, cryptocurrencies have been a means of payment already adopted in Cuba to bypass the U.S. embargo and help compatriots by Cuban exiles in the U.S.
The Central Bank of Cuba “for reasons of socio-economic interest, may authorize the use of certain virtual goods in commercial transactions and grant a license to service providers of virtual goods for operations related to financial activities, exchange, and collection of payments,” according to what can be inferred from the resolution that appeared in the Gazette.
That said, such operations must be controlled by state authorities and cannot involve activities deemed illegal in Cuba, the document adds. Cryptocurrencies, in fact, have also been the subject of some investigations in Cuba in the past due to their use for criminal activities.
This important fact is the natural consequence of the proposals regarding cryptocurrencies, presented by the Congress of the Communist Party of Cuba (PCC), the central hub of the country’s political process, last May.
The impact of cryptocurrencies
In its proposals, the body suggested studying how cryptocurrencies could help rid the country of its financial problems.
Earlier, Cuban President Miguel Díaz-Canel discussed possible plans to adopt cryptocurrencies in a “virtual meeting” with regional governors and high-level politicians.
With the country’s economic situation rapidly declining, the Associated Press reported that cryptocurrencies have quickly become popular among a growing segment of the Cuban population.
The trend has been amplified by Cubans’ reduced access to dollars, in part due to stricter embargo rules introduced under the administration of former U.S. President Donald Trump and in part due to travel restrictions imposed by health authorities to contain the spread of the Covid pandemic.
Local cryptocurrency expert Erich García said that some Cubans are already using cryptocurrencies for online purchases.
At the same time, as we know, the Cuban Communist Party continues to maintain tight control over online activities by the country’s citizens and recently introduced telecommunications regulations which have been criticized by non-governmental organizations such as the Committee to Protect Journalists (CPJ) as violating freedom of speech and strengthening state control over the Internet and citizens’ privacy.
Cuba as El Salvador
On this point, Cuba seems to follow the example of El Salvador, which was the first nation, last June, to accept BTC as legal tender. The law in Cuba regarding Cryptocurrencies is expected to take effect in less than two weeks.