Banco Central de Cuba (BCC), Cuba’s central bank, is recognizing cryptocurrencies like Bitcoin (BTC), which is now in effect.
It has been reported that the order became official on Wednesday. With crypto legally recognized by the BCC, Bitcoin and other cryptocurrencies can now be used for commercial transactions and investments in Cuba.
However, the central bank first announced plans to recognize and regulate crypto back in late August. Indeed, Resolution 215 of 2021 contains provisions for a licensing regime for crypto exchanges and other virtual asset service providers operating in Cuba. Despite legalizing the use of crypto assets in Cuba, the BCC has warned of the risks associated with cryptocurrencies.
The report said that according to the BCC, while crypto operates outside of the nation’s banking system, the use of virtual currencies poses significant monetary policy risks and financial stability concerns. Cuba’s central bank also warned of the potential for bad actors to take advantage of the perceived anonymous nature of crypto transactions for illicit transactions.
Likewise, by recognizing crypto, Cubans may begin to enjoy easier remittance flows from overseas despite the United States embargo. Global money transfer services like Western Union have largely exited the country under increasing pressure from Washington.
The country is towing a similar line to El Salvador in embracing Bitcoin amid crippling US sanctions and the economic impact of the COVID-19 pandemic. El Salvador recently became the first country to adopt Bitcoin as legal tender. Crypto interest in Cuba has been high over the last few years with virtual currencies associated with the possibility of financial freedom for many in the country.
Thus, the recognition of crypto by the BCC could be a major step in transforming Cuba’s cryptocurrency industry as a formal sector of the island nation’s struggling economy.