1. Home
  2. News
  3. Legal
  4. Cuba is getting ready to accept and recognize cryptocurrencies

Cuba is getting ready to accept and recognize cryptocurrencies

Photo of: Joseph Stone
by Joseph Stone

The Cuban government has stated that it is moving to recognize and legalize cryptocurrencies in the country. The release follows reports by CryptoPotato in May that Cuban President Miguel Díaz Canel, in collaboration with other Cuban authorities, was examining the possibility of adopting cryptocurrencies to overcome the economic and financial problems facing the country.

In a resolution published in the Cuban newspaper, Official Gazette, the Cuban Central Bank said it will set the rules for cryptocurrencies and determine how to license-related service providers in Cuba.

Here is an excerpt reported by CryptoBriefing:

The BCC… may authorize the use of certain virtual assets in commercial transactions, and license virtual asset service providers for operations related to financial, exchange and collection activities or payments.

In 2019, hostile to the Cuban socialist regime, the Trump administration decided to apply economic and financial sanctions against Cuba, including the suspension of transfers from the United States to Cuba. Gone are the days of normalization of diplomatic relations with the US reestablished under Obama.

The US sanctions have had quite a negative impact on the Cuban economy. According to an estimate by a senior Cuban official, Johana Tabalada, the U.S. repressive measures have cost the Cubans about $20 billion.

The Cubans hoped that the election of Biden to the White House would change the situation, but the Democratic candidate has maintained the same position as his predecessor with regard to the Cuban regime. For the man who was Vice President of the United States under Obama: “The Cuban government does not inspire much confidence”.

After the U.S. sanctions, the health crisis has also pushed the Cuban economy to the brink. In recent months, the country has been suffering from shortages of food and medicine. This has plunged the country into a social and political crisis. For what is historical, the Cuban people are taking to the streets to denounce this alarming economic situation.

Cubans live a lot from the remittances of their fellow citizens who live in the four corners of America, especially from those who reside in the United States. As mentioned above, the suspension of American transfers to Cuba has had a great impact on the Cuban economy. To overcome these regulatory concerns, the government is opting for cryptocurrencies as an escape from US dollars.

Cuban authorities have explained that the adoption of cryptocurrencies will be taken for “socio-economic reasons”. They have assured that they will do everything necessary to ensure that digital currencies are not used in illegal activities. However, the BCC has not disclosed the cryptocurrency or currencies that will be adopted in the country.

According to AFP, Cubans were already using cryptocurrencies in their transactions. Moreover, the exchange that operates in Cuba, Qbita reported that its platform has nearly 13,000 users and that in 2020, the number of transactions had amounted to $354,000. Insignificant, but if a cryptocurrency were to assume the status of a national currency, the numbers would be quite different.

In June, President Nayib Bukele proposed a law to Salvadoran parliamentarians to make bitcoin a national currency. By an overwhelming majority, the parliament passed the law to adopt bitcoin as El Salvador’s national currency. This is the first time a country has decided to nationalize bitcoin in its territory. Nayib Bukele bet on the “safe haven” qualities of bitcoin but also the transversality of the asset across the world which will be an important solution for the transfer sector.

Like El Salvador, Argentina is seriously considering making bitcoin its national currency as the country’s economy is ravaged by double-digit inflation. Argentine President Alberto Fernández is also counting on bitcoin’s “inflation-proof” qualities. A country like Paraguay has also expressed interest in nationalizing bitcoin.