The resolution of the Central Bank does not clarify which cryptocurrencies they will accept, nor does it establish their prices. The blocking of remittances from the United States would be a factor pushing the measure.
The Central Bank of Cuba recently announced that it authorized using some cryptocurrencies in commercial transactions. The resolution, signed by Marta Sabina Wilson González, president of the institution, does not clarify some essential aspects. For example, it does not specify the cryptocurrencies that people can or cannot use and the price they must consider for the transactions.
According to the latest provision of the extraordinary Official Gazette, the Central Bank of Cuba explains what it means by a virtual asset. They define it as a digital representation of value that people can trade or transfer digitally and use for payments or investments. According to the document, people also know that term as digital asset, crypto asset, cryptocurrency, virtual currency, and digital currency.
Although the Official Gazette does not specify which cryptocurrencies or tokens will be valid, it is clear that the Central Bank will accept Bitcoin (BTC) and Ether (ETH). Those are the two most recognized and valued cryptocurrencies in the market worldwide. The text does not indicate the price users should take into account when making a transaction.
Furthermore, the regulations do not state that merchants will have to accept payments in cryptocurrencies. Decree-Law 361/2018 establishes that the Cuban peso is the only legal currency in the territory of that country. For that reason, it is the only one that the citizens of the Caribbean island are obliged to adopt.
Difficulty sending and receiving US dollar remittances from abroad could have pushed such a measure. That situation began during the administration of former US President Donald Trump and escalated due to economic problems caused by the COVID-19 pandemic.
Details on the Use of Crypto Assets in Cuba
Transactions with virtual assets may take place between financial institutions, legal entities, and natural persons. However, the Central Bank of Cuba only authorizes people to conduct only some types of operations.
Virtual asset service providers can process financial, exchange and collection, or payment operations in and from the national territory. The Official Gazette says that state agencies and political and social organizations cannot use virtual assets and services operating with them.
The resolution will enter into force on September 15th, 20 days after the publication in the extraordinary Official Gazette. The document states that the Central Bank of Cuba will report on the intrinsic risks of using virtual assets without authorization.
How the Use of Bitcoin Has Evolved in Cuba
In April, the Communist Party of Cuba (PPC) announced that it would include Bitcoin in the new economic guidelines for the period from 2021 to 2026. A state official said that the Caribbean nation would study the use of cryptocurrencies in current economic conditions.
Amid the protests on the island this year, many Cubans donated cryptocurrencies to help people with health vulnerabilities. A group of volunteers from Matanzas, one of the areas most affected by the pandemic, used those assets to buy hygiene, food, and medicine items.
By Alexander Salazar
