The Central Bank of Cuba has published regulations that will allow virtual asset services companies to operate in the country.
Last Tuesday, March 26, the Central Bank of Cuba published a series of regulations with which will grant licenses to companies providing virtual asset services. Some economic experts point out that this measure could help the country avoid US sanctions.
The license will be available for both Cuban and foreign companies. These licenses will be valid for one year, with the possibility of obtaining an extension for another year.
According to the resolution, licensed companies will be able to work with virtual assets that have been approved by the Bank of Cuba. Digital assets do not include digital representations of fiat currency, securities and other financial assets typically used in traditional banking and financial systems, which are regulated by laws separate from the Central Bank.
Before granting licenses, the bank will analyze in depth the legality, social and economic interest, and the characteristics of the project.
On the other hand, only activities with digital assets that do not represent and are not backed by fiat money, shares or any type of financial instrument that can be used in the traditional financial sector will be allowed.
Finally, those companies that have received a license to operate in Cuba will not be able to cease operations before the one-year period established in the license, if they do not have permission from the Cuban government.
Any crime or failure to comply with this regulation will be punished following Decree 363 that regulates administrative, banking or financial violations.
Cuba and financial sanctions
Since the implementation of mobile networks in Cuba, users in the country have been using cryptocurrencies as a way of avoid harsh sanctions that the United States has been applying on the island for years.
The Cuban economy is isolated from traditional international payment systems and financial markets due to the United States trade embargo, which has been in effect for decades. For example, Cubans do not have access to credit or debit cards.
It is for this reason that, if the government is in the process of creating a favorable regulatory framework for cryptocurrencies, it is because they believe that it could benefit the economic growth of the country, by having the ability to avoid sanctions and the economic blockade.
Cuba and Central Bank Digital Currencies (CBDC)
The president of the country, Miguel Díaz-Canel, has been a strong cryptocurrency advocate, as he believes they could be an ideal tool to free oneself from the oppression of the dollar. In this sense, Cuba has studied the creation of a Central Bank digital currency (CBDC).
However, Pavel Vida, former economist at the Central Bank of Cuba, pointed out that he does not believe that the country will end up creating its own CBDC or adopting Bitcoin as legal tender, since the objective is to receive remittances from abroad without commissions and in a fast.
