- The shortage of dollars in the Caribbean country, and the desire of the Cuban government to control the cryptocurrency trade are thought to be the main reasons for regularizing its use.
- After the fall of the Venezuelan economy and the decline of remittances from the U.S., the Cuban crisis deepened.
- In Panama, a bill to regulate Bitcoin, NFTs and cryptocurrencies is set to be discussed soon, while Honduras has installed its first Bitcoin ATM.
Cuba has joined the list of Latin American countries that recognize and regulate cryptocurrency trading. The legalization of Bitcoin in El Salvador has been followed by the Caribbean country which has historically been beset by low rates of agricultural and industrial production, and high levels of misery.
The other countries in the region in which the use of cryptocurrencies as payment is allowed, and bills are advanced to regularize digital currencies, are Argentina, Venezuela, Paraguay, Colombia, Panamá, Honduras and México.
According to the resolution published by the Central Bank of Cuba, a series of rules will be established for the granting of licenses to providers of cryptographic services within the island.
Reasons to Adopt Crypto
The popularity of cryptocurrency trading has grown in recent months in Cuba, especially among sectors of the population with knowledge of blockchain technology, and due to the ease of trading with crypto assets, given the shortage of dollars.
Above all, interest grew after the tightening of trade measures against the Cuban regime by the United States during the government of former President Donald Trump, as well as due to the drastic decrease in remittances to the island sent by Cubans living abroad.
On The Flipside
- Another influence on the decline of income in dollars in the country is the crisis that Venezuela has been experiencing since 2014 due to the fall in oil prices and production.
- For 20 years, the allied government of the South American country has provided Cuba with oil, food, millionaire payments in labor (doctors and sports trainers), and investments under very favorable conditions for the island.
Cubans have been using digital currencies to conduct transactions not controlled by the government, and also to evade the internal government regulations and U.S. restrictions on money transfers to the island.
The resolution of the issuer of Cuba establishes the authorization of cryptocurrencies “for reasons of socioeconomic interest.” In this way, the government has attempted to gain control over the flow of crypto assets that circulate through the Caribbean country.
The newly approved regulations warn of a ban on using cryptocurrencies in illegal activities. ‘Small’ investors on the island typically use their phone’s internet connection to buy and receive cryptocurrencies, mostly through gift cards, revealed local expert Erich García to the AP.
Panama to Regulate BTC, NFT and Cryptocurrencies
In Panama, a bill to regulate Bitcoin, NFTs, and cryptocurrencies has already been presented for consideration by Congress. The proposed legislation is seeking to attract million-dollar investments to crypto mining.
The Central American country is also evaluating the use of digital money as an optional payment instrument for the trade of products and services. One of the novel elements of the presented bill is the obligation of mining companies to use no less than 50% renewable energy.
The bill also includes tax regulations and measures that aim to prevent money laundering, as well as rules for the use of cryptocurrencies regarding purchases and the payment of taxes, and the mining of digital assets. The legislation also includes permits for banks to design business models with crypto assets and the proper technical training for users.