The legislation legalizing the use of bitcoin and other cryptocurrencies for making payments and sending remittances in Cuba has already come into force.
This Wednesday, September 15, the regulations governing the use of bitcoin and other cryptocurrencies in the country came into force. The regulations were published in the Official Gazette of the Republic of Cuba N° 73 on August 26. The law regulates the use of a certain group of digital assets, including bitcoin, for legal use in commercial transactions, payments and remittances. It also provides for the granting of licenses to companies and service providers with cryptocurrencies.
As indicated in the country's Official Gazette, the Central Bank of Cuba recognizes as "virtual assets" any digital representation of value that can be traded or transferred digitally and used for payments or investments.
At the time of publication, the Central Bank noted that the legalization of the use and payments with Bitcoin (BTC) and other cryptocurrencies, This was done for reasons of socioeconomic interest, so financial institutions and legal entities were authorized to carry out commercial operations with these types of assets. Thus, with the regulations in force since yesterday, entities authorized by the Central Bank can now legally carry out commercial operations with cryptocurrencies between themselves and with natural persons. Other types of organizations present in the country must be authorized by the Central Bank before operating with cryptocurrencies.
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Cuba, crisis and Bitcoin
Cuba is facing one of the worst economic crises seen in history. In 2020, the year of the pandemic, the island country saw its Gross Domestic Product (GDP) fall by 11%, which accentuated the adoption of bitcoin and cryptocurrencies by its citizens. The main uses that Cubans give to crypto assets are sending remittances and commercial payments.
With the spread of the Covid pandemic worldwide and health restrictions, cryptocurrencies became the main means of sending money to Cuba. Since last year, the use of crypto assets in the country has increased significantly, so the government made the decision to regulate and legalize the use of these digital assets within its territory.
Cryptocurrency adoption in America
In America, especially in Latin America, the adoption of bitcoin and cryptocurrencies has been growing rapidly. Citizens of developing countries with a significant level of economic crisis, such as Venezuela and Argentina, are those who use cryptocurrencies the most.
In these territories, digital assets have become the way to escape the restrictions and abuses of governments and central banks, as well as a means to receive and transfer value safely, immediately, cheaply, cross-border and, above all, free of prohibitions. In fact, in its latest Crypto Adoption ReportBlockchain analysis firm Chainalysis ranks Venezuela and Argentina in 7th and 10th place among countries with the highest adoption of cryptocurrencies globally, respectively.
ETFs and legal tender
People in other countries like Paraguay, Brazil, and Colombia are also showing great interest in cryptocurrencies and digital assets. In fact, Paraguay recently introduced a bill to regulate bitcoin and cryptocurrencies; Brazil is moving forward with crypto adoption and is the first country in Latin America to launch exchange-traded funds (ETFs) for Bitcoin and Ethereum; while Colombia is moving forward with a regulatory sandbox involving its major banks and financial institutions with the aim of exchanges of the best-known cryptocurrencies in the industry.
Central America is also experiencing exciting times for the crypto industry. El Salvador is the first country in the world to make Bitcoin its legal tender, while Panama is considering possible regulation for the industry to encourage investment and boost its growth.
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