Cuba’s central bank recognizes cryptocurrencies

Cuba’s apex bank has announced that from now on it will recognize and regulate cryptocurrencies such as bitcoin, citing “reasons of socioeconomic interest.”

In its recently published Resolution 215, the central bank indicated that it will set new rules and guidelines for handling and dealing with digital currencies. Following the release of these guidelines, institutions and firms that provide or support services related to digital currencies will become subject to the oversight of the country’s apex bank. They will also be required to obtain a license from the central bank to carry on their operations.

Sanctions imposed by the United States of America on the communist state has made Cuba into a pariah in the global economy. The recent decision by Cuba to join El Salvador in embracing decentralized digital currencies presents a significant opportunity for the country to walk around the sanctions, which intensified under former President Donald Trump and has been extended under President Joe Biden.

Boaz Sobrado, a London-based fintech data analyst, who has been a part of Cuba’s digital currency journey for four years said “it’s historic that they are embracing it.”

“This is a conservative government still set in traditional Marxist ways. In fact, the communist Cuban central bank was founded by Che Guevara. The fact that they are cautiously regulating shows they are interested in what it can bring them,” Boaz added.

Analysts have associated the booming interest in cryptocurrency to the growing internet penetration in Cuba, as well as the fact that so many more people who own smartphones and 3G connectivity. Perhaps the greatest contributing factor to the appeal of bitcoin is the weakening local currency.

The possibilities are endless as regards the application of cryptocurrency in Cuba. This includes, but is not limited to, cross-border remittances and transactions. It also opens up an opportunity for Cuba to expand and increase its revenue streams. “If you’re a software developer, or if you’re an NFT artist, you could actually get paid through cryptocurrency for your labor, and I think that’s where the potential actually is. It opens up a whole new economy for Cubans to participate in,” an analyst said.