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Highlights
- In an official gazette, the Cuban government announced that it would recognize cryptocurrencies for payment.
- Cubans have found it tough to use the Dollar with the embargo set under former US President Donald Trump.
- Earlier, central American nation El Salvador had recognized bitcoin as a legal tender.
Cuba has become the latest nation to recognize and regulate cryptocurrencies. On Thursday, through an official gazette, the Cuban government had published a resolution stating that the Central Bank of Cuba will set the rules for the use of cryptocurrencies in the island nation.
Cryptocurrencies have been popular in Cuba ever since former president Donald Trump set tough embargo rules within the country. Because of that, many Cubans have found it difficult to use the Dollar in the country.
The resolution is expected to come into effect from 15 September. According to the regulation, digital currency can be used to make commercial transactions. Besides, it will also allow the operation of financial exchanges for the collection or payment activities within the nation.
Related Read: “The Wild West” - US SEC calls for crypto regulation
The popularity of Cryptocurrencies in Cuba
In fact, the move shouldn’t come as a surprise as cryptocurrencies have grown quite popular in the country. Some of the Cubans are already into Bitcoins, and among them many are using it in the form of gift cards already for online purchases of goods.
It is noteworthy that after Trump’s sanctions, the government had been exploring alternative modes to make the payment system seamless. Last year in May, Cuban President Miguel Diaz-Canel had informed that the government is exploring the means to adopt cryptocurrencies within the financial system. Following the 11% plunge in GDP due to Covid-19, President felt that an alternative payment method to the traditional required if they have to revive the economy.
With the emergence of Central Bank Digital Currencies (CBDCs), more and more countries are exploring their ways and testing digital currency. The motive is also to reduce the dependence on the Dollar as a mode of currency.
Following El Salvador’s way?
Once the latest decision comes into effect, Cuba will be the second nation to recognize cryptocurrencies as legal tender. El Salvador, the Central American country, became the first country to declare Bitcoin as a legal tender in June earlier this year. However, despite declaring Bitcoin as a legal tender, President Nayib Bukele had said that El Salvador would continue to use Dollar, and no one will be forced to make transactions in Bitcoins.
In June, Paraguay lawmaker Carlos Rejala raised the excitement that the country will introduce Bitcoin as legal tender, but the suggestion was quickly shot down.
Now with more and more countries looking to explore the CBDCs, it is just a matter of time that many would join the bandwagon of adopting the cryptos as legal tender.
