Government wants to establish cryptocurrencies in the country
Cuba wants the Bitcoin. (Image: Sabino Parente / Shutterstock)
The Cuban government sees socio-economic advantages for the island nation off the American coast in the approval of cryptocurrencies. From September 15th, their use is permitted under rules.
In May of this year, Cuban President Miguel Díaz-Canel announced that his government was examining the advisability of using cryptocurrencies from an economic perspective. At this point in time, the country, which was already struggling with a weak economic situation, had to accept another drop in its gross domestic product of eleven percent year-on-year. On the one hand, the tightening of the US embargo brought about by ex-US President Donald Trump and on the other hand the effects of the corona pandemic were responsible.
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Cryptocurrencies are an opportunity for the island nation’s weak economy
It is therefore not surprising that the government quickly decided to allow crypto currencies in its own country, especially since crypto currencies are already heavily used in the Caribbean country – only so far unregulated. The resolution on the introduction of cryptocurrencies in Cuba published on Thursday states that the country’s central bank will establish rules for such currencies and determine how providers of corresponding services in Cuba can be licensed.
A particular focus will be on “operations related to financial, exchange and collection or payment activities” in or out of Cuban territory. In the end, this could serve the state itself when it comes to circumventing US restrictions on sending money to Cuba. For many tech-savvy Cubans, Bitcoin has already become an alternative to the US dollar, which is becoming increasingly difficult to use due to the embargo, reports Euronews.
The Cuban regulation is likely to become one of the loosest in the world because the government, similar to that of the Central American country El Salvador and completely different from most industrialized countries with tight fiscal organizations, has a self-interest in the introduction. In El Salvador, for example, it is hoped to encourage remittances from citizens living abroad back to their country of origin when the crypto law comes into force on September 7th.
Cuba is likely to have similar expectations. The spirit of resolution is clearly pro crypto. Mostly because this is how the state does it, the Cuban government expressly points out in the resolution that cryptocurrencies may not be used for illegal activities and that service providers will be subject to state regulation.
