The Central Bank of Cuba warns people that they run risks when trading crypto assets. The state banking regulator gives legitimacy to the use of digital assets by Cuban citizens.
Resolution 215/2021 of the Central Bank of Cuba (BCC) recognizes payments with Bitcoin (BTC) and other cryptocurrencies on the island. That official decision recently came into effect after its publication in the Official Gazette on August 26th. This new regulatory framework also establishes the licensing of digital asset service providers operating in the national territory.
The BCC states that the objective of these new norms is to enable the use of some virtual assets in commercial transactions. It also explains that it is the only body that can authorize financial institutions and other legal persons to use crypto assets.
The agencies of the Central State Administration or political and social organizations may not use cryptocurrencies without authorization. They must request the corresponding permit to operate with those assets from the central financial entity of Cuba.
The regulations indicate that the country will maintain the Financial Action Task Force (FATF) standards. They establish the steps to follow in the prevention and detection of money laundering and terrorism financing.
Cuba’s Main Concern is the Risks that Cryptocurrencies Pose
The BCC resolution warns that cryptocurrencies pose risks to monetary policy and financial stability due to their volatility. They also claim that they are assets without support from monetary authorities and with an excess of anonymity of registered users.
These seem to be the main factors that led the authorities to formulate the regulations. In this regard, the media in that country mentioned an alert that Cuban President Miguel Díaz Canel issued in May. He referred to cryptocurrency operations that seek to maximize profits under schemes that could be fraudulent.
Canel said that the country had assessed the convenience of using cryptocurrencies to make relevant decisions. He stated that they are preventing the population from being the victim of scams in the face of world events.
In August, the BCC announced its decision to regulate several virtual assets that people could use in commercial transactions in the country. However, the resolution does not clarify several aspects like which cryptocurrencies to use and the price for transactions.
Bitcoin May Help Ease the Pain of Remittances for Cubans
In April, the Communist Party of Cuba (PPC) announced its decision to include Bitcoin in the economic guidelines for the period 2021-2026. A state official then reported that the nation would study the use of cryptocurrencies in today’s economy.
Although no one knows whether that study exists, American economist Steve Hanke believes that Cuba can profit from Bitcoin. The Caribbean country has the highest average fee payment for sending remittances, which is around 10.53%.
Remittances result from the efforts of many exiles who send money to their families to help them meet basic needs. Bitcoin offers a fast and inexpensive way to send cross-border transfers without resorting to high-cost traditional services.
By Alexander Salazar
