The Cuban central bank last Tuesday issued regulations for virtual asset service providers after giving nods to the personal use of cryptocurrencies last year, a move that some experts say could help the communist Caribbean island evade harsh US sanctions.
Cryptocurrencies, which allow for anonymous and decentralized financial transactions, have been used in the past to bypass capital controls and make payments and transfers more efficient.
The banking authorization, published in the government’s official gazette on Tuesday, requires those who want to use cryptocurrencies to obtain a license.
The bank said it would consider the legality, socio-economic interests and project characteristics of any request before granting a permit, which would initially be valid for one year.
The rollout of mobile internet three years ago paved the way for cryptocurrency transactions in Cuba, and enthusiasts on the island are growing in numbers as the currencies help overcome obstacles caused by US sanctions.
The decades-old US trade embargo cuts Cubans off from conventional international payment systems and financial markets. Cubans cannot get credit or debit cards for international use on the island and struggle to do so abroad.
“If the central bank creates a cryptocurrency-friendly legal framework, it’s because they’ve already decided it can bring benefits to the country,” said Pavel Vidal, a former Cuban central bank economist who teaches at the Pontificia Universidad Javeriana Cali in Colombia.
Several Latin American neighbors of Cuba have expressed interest in cryptocurrency, including El Salvador, the first country in the world to use bitcoin as legal tender.
Vidal said he doubted Cuba would become an El Salvador again, making bitcoin the money of his choice or coming up with its own cryptocurrency, but the government was more concerned with facilitating the importation of money transfers and international foreign trade transactions.
“This could lower the costs of these international transactions and provide an alternative to dollar-denominated operations, which are less sensitive to the sanctions plan,” he said.
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