The Central Bank of Cuba issued guidelines on Tuesday for virtual asset service providers that would require them to obtain a license to conduct crypto operations in the country.
Cuban Central Bank Announces Crypto License
On Tuesday, the announcement from the central bank was published in the Cuban government’s official gazette, disclosing that those who wish to use or trade cryptocurrencies would need to acquire a license with a year-long validity period, which can be extended to two years. The criteria for granting a license will be based on factors like legality, socioeconomic interest, and project characteristics. According to the gazette, the license will be available to individuals or organizations, both Cuban and foreign.
The license would greenlight all crypto-related operations as long as they do not include digital representations of fiat currency, securities, or any other financial assets commonly used in traditional economic models. Once licensed, service providers can not cease operations without prior authorization from the central bank. Any violations of the license would result in penalization under Decree 363, which deals with administrative violations of banking, financial, and foreign exchange provisions.
Crypto: A Blessing For Embargo-Riddled Cuba
The Cuban government had previously given the nod to the country’s crypto industry. In 2021, the government approved the use of crypto in personal situations, which could be used to circumvent strict sanctions imposed by the US. It started with the arrival of mobile internet in Cuba. Citizens were exposed to the benefits of crypto transactions instead of suffering under the decades-long trade embargo imposed by the US.
A former economist from the Central Bank, who now teaches at Colombia’s Pontificia Universidad Javeriana Cali, said,
“If the central bank is creating a cryptocurrency-friendly legal framework, it is because they have already decided that it can bring benefits to the country. This can reduce the cost of these international transactions and generate an alternative to operations in dollars, less sensitive to the sanctions scheme.”
Following El Salvador?
Last year, the island nation already issued a CBDC (Central Bank Digital Currency). The Cuban president Miguel Diaz-Canel has always been favorable towards cryptocurrencies, eyeing them as a means to end the oppression of the US dollar. While explaining the government’s consideration to purchase crypto, Diaz-Canel was quoted as saying,
“The country is studying the use of cryptocurrencies with the aim of belonging to a financial scheme that does not have the dollar as the central point of monetary transactions.”
There is an abundance of opinion that Cuba could be following in the footsteps of its Latin American neighbor El Salvador, which had adopted Bitcoin as legal currency in 2021. However, the country has not shown any indication of taking such a monumental step. For now, the license will focus on establishing a regulatory framework for crypto activities in the country.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
