Cuba to recognise, regulate cryptocurrency

Popularity of the digital currency has grown in Cuba, in part because of restrictions on remittances from the US.

Latin American countries have increasingly eyed cryptocurrencies to evade remittance costs and restrictions [File: Ramon Espinosa/AP]
Latin American countries have increasingly eyed cryptocurrencies to evade remittance costs and restrictions [File: Ramon Espinosa/AP]

Cuba has said it will recognise – and regulate – cryptocurrencies for payments on the island in a move that could help to circumvent American sanctions.

A resolution published in the Official Gazette on Thursday said the central bank will set rules on cryptocurrencies and determine how to license providers of related services within the communist state.

The announcement comes as the popularity of cryptocurrency has grown in Cuba among some technologically savvy groups, as it has become increasingly difficult to send and use US dollars on the island, in part because of toughened embargo rules imposed under former United States President Donald Trump.

While some expected President Joe Biden to seek to normalise relations, as former President Barack Obama did, he has instead taken a harder line, imposing further sanctions against Cuban officials following crackdowns on rare protests in the country.

Cuba’s move comes after El Salvador recently announced it would recognise the use of the cryptocurrency Bitcoin as a way to encourage remittances from its citizens living abroad.

The currencies, which can shift wildly in value, are usually independent of any central bank and use widely distributed blockchain computer codes to keep track of transfers.

Because they can be used for long-distance transactions that are supposedly anonymous, they are often popular with people attempting to evade government regulations, which could include circumventing US restrictions on sending money to Cuba.

The resolution said the central bank can authorise use of cryptocurrencies “for reasons of socioeconomic interest” but with the state assuring operations are controlled.

It also explicitly noted that operations could not involve illegal activities.

A local cryptocurrency expert, programmer Erich García, told The Associated Press some Cubans are already using such devices, often via gift cards, for online purchases.

Source: News Agencies

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