In recent months, the number of cryptocurrency transfers have increased sharply in Cuba. The country, which is facing a terrible economic crisis, wants to regulate cryptocurrencies for "socio-economic" reasons.
Is yet another country embracing cryptocurrency? After El Salvador, which is preparing to officially recognize the use of bitcoin as a legal tender on September 7, Cuba could do the same. In any case, the Cuban government has acknowledged that it wants to regulate cryptocurrencies as a means of payment for the Caribbean island. A text published in the country's Official Gazette indicates that Cuba's central bank will set rules to regulate these currencies and determine in what context they will be available.
The Cuban resolution, which will go into effect on September 15, 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 on or from Cuban territory. Crypto-currencies have become popular in recent months due to the difficulties of using dollars because of the latest embargo rules imposed by former US President Donald Trump.
A risk in an unstable market
Sending and receiving money has been made extremely difficult between the two countries. For instance Western Union closed all of its 400 exchange sites in the country in 2020. The local currency, the Cuban peso, is perceived as weak and volatile. Although experts continue to point out the risk of these particularly volatile cryptocurrencies, it all adds to the appeal of these new currencies.
The use of these cryptocurrencies in Cuba often takes shape through gift cards, which then get used to make online purchases. Unsurprisingly, bitcoin is the currency most used by the island's inhabitants. The risk for the government is that these currencies can depreciate sharply and it must ensure that it monitors transactions to avoid legalizing money involved in illegal activities. Crypto-currencies continue to make headlines and many countries seem to be getting on board despite the risks. Something to keep an eye on for the near future.
