- The new legislation will take effect on May 16th and will allow cryptocurrency exchanges to freely trade crypto assets.
- The only body authorized to grant operating licenses will be the Central Bank.
- The country is taking steps to capture the cryptocurrency market in order to help it navigate its economic crisis.
After its approval from the Central Bank of Cuba, all services utilizing Bitcoin and other digital assets will be authorized to operate in the Caribbean island as of May 16th. However, they must first apply for an operating license from the issuing institute.
Activities using cryptocurrencies were legalized on Tuesday, April 26th, after a meeting held by the nation’s issuing body, which approved measures to regulate the granting of licenses to companies that trade in cryptocurrency.
In accordance with the provisions of ‘Official Gazette No. 43 Ordinary‘, the Central Bank will be in charge of approving applications for operating licenses with Bitcoin and other virtual assets for natural and legal persons.
"[To] establish the specific requirements for the authorization, operation, regulation, supervision, surveillance, corrective mechanisms and cancellation of licenses for virtual asset service providers that operate in and from the national territory," the document states.
The resolution outlines that:
“The Central Bank of Cuba, when considering the license request, evaluates the legality, opportunity and socioeconomic 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 issues the license, after consulting the Cryptoactive Group.” Likewise, it warns that local and foreign companies operating without a legal license will face the sanctions established in the banking and financial legislation put in force within the country.
The regulations indicate that operational licenses will have a duration of one year and can be extended for an additional year “given the experimental and innovative nature of this type of activity.”
On the Flipside
- The document clarifies that authorized operators will not be able to cease the offering of their services in the country without the prior authorization of the Central Bank of Cuba.
- They will therefore be obliged to continue their operations regardless of the profitability of the business.
With this new step, Cuba continues to move rapidly towards adopting Bitcoin as legal tender. The government had already authorized the use of cryptocurrencies as a payment method as of September 15th of last year.
Why You Should Care
- The country’s economy largely depends on remittances sent by Cubans residing in the United States, as well as from oil and other resources transferred by the Venezuelan government.
- However, since November 20th, 2020, companies that provide remittance services, such as Western Union, have been forced to cease operations in the region due to the economic sanctions imposed on the U.S. government.
- Through cryptocurrency exchanges, it will once again become possible to send remittances, now faster and at a lower cost.