Cuba may adopt cryptocurrencies following the example of El Salvador
The Cuban authorities announced their intention not only to regulate but also to recognize cryptocurrencies as a means of payment, despite the anti-government protests in the country.
Last month, massive protests erupted in Cuba over a shortage of food and medical supplies, following a deep economic crisis that has plagued the country for decades. All of this was exacerbated as the effects of COVID-19 escalated, new sanctions by foreign states, and the authorities' decision to end the era of the dual-currency system. The latter has led to the fact that locals have lost colossal amounts of money when trading Cuban convertible pesos (CUP). The representative of the President of Cuba, in turn, accused “hired agents” of the mass actions that took place.
Meanwhile, in a promulgated resolution, Banco Central de Cuba revealed details of how it will provide citizens with access to a new asset class such as Bitcoin and Ethereum. As in the case of El Salvador, this move can be seen as a desire to integrate cryptocurrencies into the daily life of Cubans.
The decree of the Cuban Central Bank mentioned the main aspects of regulating the use of digital currencies in commercial transactions and how the licensing of service providers associated with them will be carried out. Transactions of various financial institutions and other legal entities for the fulfillment of monetary obligations, exchange of funds, and swapping may be carried out only with the permission of Banco Central de Cuba.
According to the resolution of the Central Bank, state and administrative departments should refrain from using the new asset class in transactions, except for those when they received official permission from Banco Central de Cuba. In addition, the bank stressed the importance of responsibility for possible risks and liabilities that entail working with digital currencies and service providers outside the financial and banking systems.
Given the problems and restrictions that local people faced due to sanctions from the ex-President of the United States, Donald Trump, the tech-savvy part of the country's population reacted with particular interest to the possible introduction of digital currencies as a means of payment.
But will Cuba be able to follow in the footsteps of El Salvador in its desire to spread cryptocurrencies, or will it lead to even tighter regulation of the industry in the country?