Cuba Approves Cryptocurrency Services, Requires Central Bank License
Cuba’s central bank issued regulations for virtual asset service providers on Tuesday, after giving a nod to the personal use of cryptocurrencies last year, a move some experts say could help the economy. communist-ruled Caribbean island to circumvent tough US sanctions.
Cryptocurrencies, which allow financial transactions to be carried out anonymously and in a decentralized way, have been used in the past to circumvent capital controls, as well as to make payments and transfers more efficient. The banking authorization, published in the government’s official journal on Tuesday, requires those wishing to use cryptocurrencies to obtain a license.
The bank said it would review the legality, socio-economic interest and project characteristics of any application before granting a license, which would initially be valid for one year. The rollout of mobile internet three years ago paved the way for cryptocurrency transactions in Cuba, and enthusiasts on the island are growing as currencies help overcome barriers created by US sanctions.
The decades-old US trade embargo cuts Cubans off from conventional international payment systems and financial markets. Cubans cannot obtain international credit or debit cards on the island and find it difficult to do so abroad. “If the central bank creates a favorable legal framework for cryptocurrencies, it is because it has already decided that it can bring benefits to the country,” said Pavel Vidal, a former Cuban central bank economist who teaches at the Pontificia Universidad Javeriana Cali in Colombia.
Several Latin American neighbors of Cuba have taken an interest in cryptocurrency, including El Salvador, the first country in the world to adopt bitcoin as legal tender. Vidal said he doubts Cuba will become another El Salvador, making bitcoin its currency of choice or offering its own cryptocurrency, but instead the government plans to facilitate the entry of remittances and foreign trade operations. international.
“This can reduce the cost of these international transactions and generate an alternative to dollar transactions that is less sensitive to the sanctions regime,” he said.
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