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- In the Island nation, a cryptocurrency is now a legal form of payment for business transactions
- The directive was made public on Wednesday, according to Cuba’s official state news agency, Prensa Latina
- Over the last few years, there has been a lot of interest in cryptocurrency in Cuba
The central bank of Cuba, the Banco Central de Cuba (BCC), has issued Resolution 215 of 2021, which recognizes cryptocurrencies such as Bitcoin (BTC). According to Prensa Latina, Cuba’s official state news channel, the instruction went into effect on Wednesday.
Crypto can be used for business transactions in Cuba
According to the BCC’s legal recognition of crypto, Bitcoin and other cryptocurrencies can now be used for business transactions and investments in Cuba. Notably, at the end of August, the central bank stated its desire to adopt and regulate Bitcoin.
For example, Resolution 215 of 2021 contains a provision for a licensing system for cryptocurrency exchanges and other cryptocurrency-related service providers operating in Cuba. Despite permitting the use of bitcoin in Cuba, the BCC has issued a warning about the risks associated with it.
Although bitcoin operates outside of the country’s banking system, the BCC claims that its use poses significant monetary policy risks and financial stability concerns. Cuba’s central bank has warned that the apparent anonymity of cryptocurrency transactions could be used by unscrupulous parties for unlawful reasons.
Cubans may be able to get simpler remittances from abroad if they accept cryptocurrencies, despite the US embargo. International money transfer services such as Western Union have essentially departed the country as a result of increasing pressure from Washington.
Furthermore, in the face of crippling US sanctions and the economic impact of the COVID-19 pandemic, the country is following in the footsteps of El Salvador in adopting Bitcoin. El Salvador was the first country to accept Bitcoin as legal tender.
There has been a spike in crypto interest in Cuba over the last several years, with cryptocurrencies being linked to the potential of financial independence for numerous Cubans. The BCC’s acceptance of cryptocurrencies might be a big step toward establishing the cryptocurrency industry in Cuba as a legitimate part of the island’s economic recovery.
In Cuba, Bitcoin is already widely used
The currencies, which can fluctuate dramatically in value, are mainly decentralized and rely on globally distributed blockchain computer protocols to keep track of transactions. Some Cubans are already using such devices, frequently via gift cards, for internet transactions, according to local bitcoin expert Erich Garca. According to unofficial estimates, 10,000 Cubans use Bitcoin, making it one of the country’s most popular digital currencies.
President Miguel Dáz-Canel indicated in May that his government was looking into the feasibility of adopting cryptocurrency in the country’s economic activities after the US embargo tightened and the impact of the COVID-19 pandemic caused the country’s GDP to plummet by 11% in 2020.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
