New regulations in Cuba: bitcoin can be there

On Wednesday, September 15, new legislation regulating bitcoin and bitcoin companies went into effect in Cuba. Under the new rules, commercial bitcoin transactions are allowed and bitcoin companies are allowed to operate in Cuba if they have a license from the Cuban central bank.

Cuban legislation sets rules for using bitcoin in commercial transactions and introduces a licensing regime for service providers that facilitate bitcoin trading and transactions. Payments in bitcoin and the exchange thereof are therefore officially allowed. It involves commercial transactions, exchange and redemption, and to meet monetary obligations.

Bitcoin companies are now under the supervision of the Cuban central bank and are allowed to operate in the country if they have a license. The resolution containing the rules mentions socio-economic interests as the reason for granting permission. The Cuban government seems to be opening the door for bitcoin and the bitcoin sector.

Not legal tender

The rules nevertheless emphasize the importance of the central bank and that the Cuban peso is Cuba’s only real legal tender. Government organizations will therefore refrain from using bitcoin, unless the central bank gives explicit permission to do so.

Bitcoin, on the other hand, falls under ?«£virtual assets.?«• That, according to the resolution, is a digital representation of value that can be traded, transferred and used digitally for payments or investments.

Sanctions

CNBC previously reported that US sanctions against Cuba may play a role in the implementation of the new rules. In recent years, the measures have become stricter, making it increasingly difficult to send money between the United States and Cuba. For example, Western Union closed all 400 offices in Cuba due to the sanctions.

Cuban migrant workers working in America therefore encounter great difficulties in sending money to relatives in their home country. Before the COVID crisis, therefore, a lot of cash was used, which was secretly smuggled into the country by couriers and eventually circulated among the population.

When a large part of the flights were halted due to the pandemic, large cash shortages arose, which would have increased the popularity of bitcoin among the population.

trend

There seems to be a trend among countries to introduce favorable ‘Bitcoin laws’. El Salvador recently recognized bitcoin as legal tender, making it one of the country’s two official currencies. President Bukele hopes that it will save the population on the costs of international transactions and that it will attract activity and investment from the bitcoin sector.

This idea seems to be popular with more countries. Politicians from other Latin American countries such as Panama, Paraguay, Mexico and Colombia quickly indicated that they also wanted to propose new legislation. Such plans are also being made in the small island nation of Tonga. It remains to be seen whether those plans will be followed.

A concrete step was taken in Ukraine last week. There, parliament voted to regulate and legalize bitcoin. There, too, it is hoped to attract the bitcoin sector, among other things to use the overcapacity of local nuclear power plants for bitcoin mining.

New legislation has also been in effect in Texas since September, which provides more clarity with regard to bitcoin and bitcoin payments. With this, Texas also hopes to improve the business climate for companies that work with bitcoin.

Other sanctioned countries have also discovered bitcoin. For example, the Venezuelan army has a mining farm to use the proceeds to import goods from abroad, and Iran also wants to use bitcoin for imports.

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