Cuba is one step closer to adopting Bitcoin (BTC). Indeed, 7 months after legalizing cryptocurrency payments on its territory, the Central Bank of Cuba will now issue licenses for all digital asset service providers. One more way for Cuba to bypass the US embargo in place since 1962.
Cuba to issue licenses for cryptocurrencies
Seven months after welcoming cryptocurrency payments in its territory, Cuba will start issuing licenses for Bitcoin (BTC) and other digital assets.
In fact, according to the Official Gazette No. 43 of this Tuesday, any organization that qualifies as a digital asset service provider will now have to apply for a license from the Central Bank of Cuba in order to operate in the territory.
The Central Bank of Cuba, when examining the application for a license, evaluates the legality, opportunity and socio-economic interest of the initiative, the characteristics of the project, the responsibility of the applicants and their experience in the activity. […] The Central Bank of Cuba establishes in the license, the characteristics of the virtual assets, the conditions and restrictions of the authorized operations, as well as the measures to be respected for the control and custody of the virtual assets. “
Also, according to the document, any organisation that refuses to comply with these new guidelines will face sanctions in accordance with the financial laws of the island state.
Initially, these licenses will be valid for one year and then renewable for a second year, “given the experimental and new nature of this type of activity”. These new regulations will come into force on 16 May next
A way around the US embargo
Cuba is one step closer to adopting Bitcoin as a legal tender. Indeed, since September 15, 2021, Cubans can use cryptocurrencies as a means of payment.
Still under a US embargo, the island of Cuba is severely restricted in its access to digital services. For example, Cubans cannot obtain Internet domain names or buy Spotify subscriptions by credit card.
Virtually cut off from the global financial system, Cubans are also unable to make purchases on the internet, so their only way around these restrictions is through cryptocurrencies. As a result, more and more locals are having to go through services like the “Bitrefill” site in order to make purchases that we would consider normal, but through cryptocurrencies.
Fintech companies such as Wise, Stripe, Revolut or Venmo, for example, instantly block any attempt by a Cuban citizen or company to use their services. Furthermore, in November 2020, Western Union also stopped its services in Cuba, severely penalising Cubans’ means of transferring money.
On a broader scale, businesses operating on Cuban soil cannot benefit from international payment services considered to be democratised such as PayPal, Mastercard or Visa.
Such is the success of crypto-currencies in the face of all these blockages that today it is the Central Bank of Cuba that sees Bitcoin as an opportunity to more broadly bypass all the restrictions established by the Americans for 60 years now.
