Cuba’s Government set to recognise and regulate bitcoins for payments


As per resolution
215 published on Thursday Cuba’s government said in its state-run Official
Gazette that it would “recognize and regulate” Bitcoin and other cryptocurrencies
for payments on the island.
The country’s central
bank is drafting legislations and will set new rules for how to deal with
digital currencies. Now a license to continue operations connected to virtual
assets will need to be given to commercial providers of related services from
the central bank.
Reasons for
taking this step by Cuba’s government
The citizens were facing harder to use United
States dollars for purchases. Temporarily the country had to stop accepting
cash bank deposits in U.S dollars due to stringent rules and restrictions set
by former United States President Donald Trump and current President Biden has
increased pressure on Cuba’s government. In 2020, Western Union, an American
multinational financial services company, operating a particularly significant
channel for remittances in Cuba for more than 20 years, closed all its
locations numbering to more than 400, due to increasingly aggressive sanctions
done during Trump tenure. The process of getting money into and out of the
country was made even more complicated by the Covid-19 pandemic. As per report,
before the Covid outbreak, to carry cash to Cuba and distribute it to people on
the island some Cubans use semi-formalized courier services called mulas. Later
due to pandemic flights around the world were cancelled lead difficulty to cash
this way.
Due to rise of
the internet in Cuba there was rise in crypto community. Also rise in number of
people having smartphones and 3G connectivity contributing to the appeal of
bitcoin. The weak local currency is also a factor for this.
Other country
planning to change cryptocurrency regulation
Next month, struggling
economies, El Salvador will also start adopting Bitcoin (BTC) as legal tender
alongside its main currency, the U.S. dollar.
Politicians in
several other Latin American countries including Paraguay, Mexico, and Panama
have showed interest in introducing cryptocurrency in their countries.

Indrani bose
CBW - External Analyst
INDIA