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Cuba approves cryptocurrency services, requires central bank license -Breaking


© Reuters. FILEPHOTO A picture of Bitcoin, a virtual currency taken from October 19, 2021 is shown in the illustration. REUTERS/Edgar Su

Marc Frank

HAVANA (Reuters – Cuba’s central bank has issued regulations for virtual asset service providers. It did so after giving approval last year to personal use. Some experts believe that this move could be a way for the Communist-run Caribbean island of Cuba to get around stiff U.S. restrictions.

In the past, cryptocurrencies have been used anonymously to decentralize financial operations and to speed up payments.

Published Tuesday in government’s official gazette is the bank authorization. It requires anyone who wants to use cryptocurrency to get a license.

According to the bank, it would assess whether a request is legal, legitimate, economically sound, or unique in its project characteristics prior to granting a license. This would initially be good for one-year.

Three years ago, mobile internet was introduced in Cuba. This has allowed cryptocurrency transactions to be made in Cuba. The number of enthusiasts is growing as these currencies are helping overcome U.S. sanction barriers.

Cubans have been cut off from traditional international financial and payment markets for decades by the U.S. trade embargo. Cubans are unable to obtain debit or credit cards that can be used internationally for their own use, and they have difficulty obtaining them abroad.

“If the central bank is creating a cryptocurrency-friendly legal framework, it is because they have already decided that it can bring benefits to the country,” said Pavel Vidal, a former Cuban central bank economist who teaches at Colombia’s Pontificia Universidad Javeriana Cali.

Many Latin American countries, such as Cuba, have expressed interest in crypto, with El Salvador being the first to use bitcoin legal tender.

Vidal indicated that he didn’t think Cuba would be another El Salvador. He said bitcoin was the money choice for Cuba, and Cuba could also come up with its cryptocurrency. However, Vidal claimed the government is looking to facilitate the transfer of funds as well international trade operations.

“This could lower the costs of international transactions, and create an alternative operation in dollars that is less sensitive than the sanctions scheme,” said he.