Cuba May Authorize Bitcoin Payments for Local Transactions
The Central bank of Cuba has announced its intentions to regulate the use of cryptocurrencies in commercial transactions across the country.
Government Agencies Barred From Using Crypto
The Cuban Central Bank (BCC) said in a resolution that the bank must duly authorize the use of Bitcoin in commercial transactions. The new regulation emphasizes that cryptocurrencies may be authorized to be used “for reasons of socio-economic interest.”
However, the BCC noted that government administration agencies are not permitted to use cryptocurrencies in transaction settlements except authorized by the central bank.
Additionally, the bank has established rules to license institutions handling cryptocurrencies in the country. According to the resolution, firms that use virtual assets for operations related to financial, exchange and collection or payment activities must now be licensed to operate.
The BCC also made it clear that financial institutions and other legal entities can only use virtual assets within their sector and with interested members of the public.
However, the BCC also showed off its skepticism regarding digital assets by warning consumers about the risks of virtual money. The bank issued a disclaimer, cautioning users to refrain from investing or transacting with virtual assets due to the volatility issues surrounding the nascent industry.
The BCC also pointed out that cryptocurrencies risk being used to finance criminal activities due to their anonymous nature.
Therefore the bank said that whoever gets involved in these transactions would ultimately bear any civil, criminal, or liabilities involved.
Cubans Turn To Cryptocurrencies
The popularity of cryptocurrencies in Cuba has grown remarkably in the country. The decade-long economic embargo placed by the US alongside the rapidly increasing coronavirus cases has led to thousands of citizens switching to crypto to send money across to loved ones.
The US sanctions against Cuba led to international banks and transfer companies avoiding the island, making remittances difficult for its over 1.7 million citizens. For instance, the world's largest money transfer service, Western Union, suspended US dollar transfers to Cuba last year.
The Central bank's new resolution indicates that Cuba finally recognizes cryptocurrencies in the country as a legal means, and this is a welcome development. The new cryptocurrency regulations come after citizens staged anti-government protests on the island last month.
Thousands of Cubans had protested against the economic crisis and the government's handling of the coronavirus pandemic and curbs on civil liberties.