Cuba’s government announced on Thursday that cryptocurrencies will be recognised and regulated as a form of payment on the Caribbean island.
The country’s Central Bank will develop rules for such currencies and determine how to licence providers of related services within Cuba, according to a resolution published in the Official Gazette.
It comes as El Salvador, a Central American country, prepares to recognise Bitcoin as a means of encouraging remittances from its residents residing abroad when its crypto law takes effect on September 7.
After September 15, the new law governs “the use of some virtual assets in commercial transactions” as well “the licencing of providers” for “operations linked to financial, exchange, and collection or payment activities” in or out of Cuban territory.”
As it has become more difficult to spend dollars, such currencies have increased in appeal among a digitally sophisticated group in Cuba, in part due to tighter embargo measures enforced by former President Donald Trump.
A twitter user wrote that “Cuba recognizes and regulates cryptocurrencies and decides how to license relevant service providers in Cuba, while making it clear that illegal activities are not involved.”
Around 10,000 Cubans use Bitcoins, making it one of the most extensively used cryptocurrencies in the country, according to unofficial estimations.
Cuban government not only regulates crypto but cuba regulates the use of virtual assets for Commercial Transactions also.
President Miguel Dáz-Canel indicated in May that his government was looking into the feasibility of adopting cryptocurrency in the country’s economic activities, after the US embargo was tightened and the impact of the COVID-19 pandemic caused the country’s GDP to plummet by 11% in 2020.
GOVERNMENT WILL AUTHORISE CRYPTO USE BUT…
According to the decision, the Central Bank might authorise the use of cryptocurrencies “for reasons of socioeconomic interest,” but only if the government guarantees that their operations are regulated.
It further stated that no illicit activity could be part of the operations. They are popular with persons intending to dodge government rules, such as US bans on transferring money to places like Cuba, because they may be used for long-distance transactions that are apparently anonymous.
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