Banco Central de Cuba (BCC) which is the Central Bank of Cuba, announced Tuesday that it will begin granting licenses for Bitcoin (BTC) and other virtual asset services providers, VASPs. This step will support the growth of Cuba’s nascent tech industry,

The legalization of virtual assets provides Cubans with more access to remittance services and allows them to send and receive funds freely around the world. In Cuba's official gazette No. 43, a Spanish-language resolution got published. The license will be issued to an individual or legal person including an organization be it Cuban or foreign. As BCC said, licenses will be valid for one year and can be extended for a second year. The BCC will allow providers to operate with assets approved by it, according to the resolution. By virtual assets, it excludes digital representations of fiat currency, securities, and other financial assets which are used in traditional banking and financial systems, that are regulated in other provisions of the Central Bank of Cuba.

Further, the document added, that companies operating without a license and those required to do so can expect penalties in line with existing banking and financial rules on the island nation. The Gazette specifies that 20 days after its publication this decision will enter into force, which is May 16. VASPs are also forbidden from ceasing services without authorization from the central bank, according to the bank's terms.

No information has yet been provided by the Cuban government on the process of levy taxes on the virtual asset activity. Specifically, the BCC must respond to the request for a license within 90 working days of receiving the required documentation. BCC will first discuss with a Crypto Assets Group in order to issue a license.

To manage the use of virtual assets in commercial transactions and licensing of service providers in that sector, BCC issued a resolution establishing rules in August. In that previous resolution, the bank had been allowed to grant licenses to those who provide virtual asset services in and out of the nation, the BCC recalled on Thursday. Government agencies were then prohibited from using virtual assets in transactions except when they were authorized by the BCC.

Last year in the month of September, the BCC issued a ruling which says Bitcoin is a legal payment method. The institution is still concerned about the risk of using cryptocurrencies. The central bank was made the only entity that can issue licenses to VASPs.

Indrani bose

CBW - External Analyst

INDIA