Cuba jumps on Bitcoin (BTC) bandwagon. Considers legal recognition
The Cuban government, which has been actively reviewing possible ways of adopting cryptocurrency to overcome their financial struggles, has opened the door to Bitcoin (BTC).
The Cuban government has announced yesterday that it will recognize cryptocurrencies and regulate their use for payments.
The decentralized nature of cryptocurrencies, such as Bitcoin (BTC), could provide a viable alternative for the Caribbean island nation, suffering under sanctions that crippled the usage of the US dollar.
According to the Resolution published in the Official Gazette, the rules for cryptocurrencies will be set by the Banco Central de Cuba (BCC), the country’s central bank that will also determine ground rules for licensing providers of related services within the Cuban market.
“The objective of this Resolution is to establish the rules based on of which the BCC regulates the use of certain virtual assets in commercial transactions, as well as the granting of a license to virtual asset service providers for operations related to financial, exchange and collection or payment activities, in and from the national territory,” read the document.
Made for fighting financial exclusion
Bitcoin is a viable alternative for the island nation to bypass the US restrictions on sending money to Cuba and has been gaining popularity as the economy spiraled down further during the pandemic.
Toughened embargo rules imposed by former US President Donald Trump made it difficult for Cuba to find international banking or financing institutions willing to receive, convert or process US currency in cash.
As a result of imposed sanctions, numerous banks have stopped processing transactions involving Cuba, but Bitcoin doesn’t care.
The BCC, which “has as part of its mission, to promote, in accordance with its powers, the stability of the purchasing power of the national currency and contribute to the harmonious development of the economy,” can authorize the use of cryptocurrencies for “reasons of socio-economic interest,” read the Resolution, which underlined that the state will be ensuring these operations are controlled and do not involve illegal activities.