The Cuban government has now made cryptocurrency a legal method of payment for commercial transactions
Back in August, there were reports that the island nation would recognize and regulate cryptocurrency very soon. Just a month later and Resolution 215 of 2021 issued by the Banco Central de Cuba (BCC) recognizes cryptocurrencies such as Bitcoin (BTC) as currency effect of the 15th of September.
The official announcement came via state news agency Prensa Latina. Now that the BCC officially recognizes Bitcoin as well as other cryptocurrencies as payment for commercial transactions and investments in Cuba, it really opens up a lot of avenues for digital assets to grow on the North Caribbean island.
What does this mean for Cubans?
The new Resolution will give provisions for licensing crypto exchanges and associated virtual asset services. This will mean that the full spectrum of crypto services can begin operating in Cuba; from NFTs to DEXs, Cuban’s may see all of these services up and running in the near future.
This isn’t to say that island residents are going to be interested in adopting crypto assets, with the BCC warning citizens of the risks associated with cryptocurrencies. Crypto operations will take place outside of the nation’s banking system, which is something that the government has made clear. The volatility and associated risks aren’t something that the BCC can control. Similarly, the government is aware of the potential illegality of transactions made taking advantage of the anonymity of crypto transactions.
With many Cuban nationals living in the U.S., regular remittance payments are made to families back in Cuba. In the past, these payments were made using money transfer services such as Western Union or through online payment platforms. But, with regulations on the rise and fees attached to money transfers, using cryptocurrency to make transfers has great appeal.
Not long ago we saw El Salvador declare Bitcoin as legal tender, which differs from what has happened in Cuba. However, the appeal of decentralized finance is the same in both nations. A combination of a lack of work opportunities and the harsh reality of the COVID-19 pandemic has left many in Central America, and indeed across the globe, feeling the weight of the economic impact. This has pushed some people to look elsewhere to find financial solutions.
Cryptocurrencies offer economic freedom and the opportunity to find a financial safe haven. Whatever it may be, the recognition of crypto by the BCC sets Cuba up for a bright future.