Starting today, Cuba has regulated cryptocurrencies for payments on the country in a move that could help to circumvent American sanctions. In a resolution published in the Official Gazette on Thursday, it is said that the Central Bank will set rules for using cryptocurrencies and determine how to license providers of related services within the island country.
The Central American nation of El Salvador has also officially recognized the use of Bitcoin as a way to encourage payments from its citizens living abroad when its crypto law comes into effect on September 7th.
The announcement follows the growing popularity of cryptocurrency in Cuba among technologically savvy groups. It is becoming difficult to send and use US dollars in the country, partly because of the rules imposed under former United States President Donald Trump. In order to bypass the restrictions, Cuba is recognizing and regulating crypto as a means of payments, because they can be used for long-distance transactions that are supposedly anonymous.
While it is expected that President Joe Biden will normalize the two countries’ relations, as former President Barack Obama did, he has so far instead taken a harder line and imposed further sanctions against Cuban officials following crackdowns on rare protests in the country.
The resolution says the Central Bank can authorize use of cryptocurrencies for reasons of socioeconomic interest but with the state assuring that their operations are controlled. It also explicitly notes that operations could not involve illegal activities. It comes into effect on September 15th and it regulates the use of certain virtual assets in commercial transactions, as well as the licensing of providers of these services in operations related to financial, exchange and collection or payment activities in or from Cuban territory.
According to unofficial It is estimated that 10,000 Cubans use Bitcoin, making it one of the most widely used cryptocurrencies in the country.