Cuba plans to recognize and regulate cryptocurrency

    01 Sep 2021

    Cuba is reportedly going to recognize and regulate cryptocurrencies for payments. Per Aljazeera, the central bank of the Caribbean country will establish rules for mainstreaming cryptocurrency transactions. Cuban authorities are also expected to distribute relevant licenses to businesses providing crypto-related services.

    The popularity of cryptocurrency trading has grown in recent months in Cuba, especially among sectors of the population with knowledge of blockchain technology, and due to the ease of trading with crypto assets, given the shortage of dollars, in part because of toughened embargo rules imposed under former United States President Donald Trump.

    Western Union, the main remittance channel to Cuba for more than 20 years, closed its more than 400 locations in 2020 amid the increasingly aggressive US sanctions at the time.

    President Joe Biden has also taken a harder line, imposing further sanctions against Cuban officials following crackdowns on rare protests in the country.

    Cubans have been using digital currencies to conduct transactions not controlled by the government, and also to evade the internal government regulations and U.S. restrictions on money transfers to the island.

    The newly approved regulations warn of a ban on using cryptocurrencies in illegal activities. Small investors on the island typically use their phone’s internet connection to buy and receive cryptocurrencies, mostly through gift cards, local expert Erich García told the AP.

    Also, the resolution said the central bank can authorize the usage of cryptocurrencies “for reasons of socioeconomic interest” but with the state assuring operations are controlled.

    Amid the other countries in the region in which the use of cryptocurrencies as payment is allowed, there are Argentina, Venezuela, Paraguay, Colombia, Panamá, Honduras, and México. While El Salvador’s Bitcoin adoption can potentially transform the remittance landscape across Latin America, stated the Central American Bank for Economic Integration (CABEI).

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