On Tuesday, the Central Bank of Cuba announced a regulation framework that would serve as guidelines for crypto usage within the boundaries of the country. The rule requires every crypto investor to be licensed before any operation.
The Central Bank Cuba Legalized Crypto
Few days ago, the Cuban official gazette published a paper containing the news from the Cuban regulatories. The publication informed those who intend to invest or trade digital assets that they need to apply for a license that will legalize their activities in the crypto space. The license is said to be a one or two years long agreement. The eligibility of an individual or organization to obtain a license is based on factors such as socioeconomic impart, legality and features of the project. The gazette added that the license would be granted to anyone that is eligible, both foreign and native personnel or firm.
The license would serve as a legal backing for all virtual currency activities so far they are not securities, digital native currency, or any form of financial assets often used traditionally.
Service providers that are licensed cannot stop its activities unless it has been given the go ahead by the central bank. Anyone whose action contradicts the stated rules in the license would be penalized according to Decree 363 that was set to punish administrative disobedience of financial, banking and foreign exchange provisions.
Crypto: An Escape Route For Sanction-Riddled Cuba
In the previous year, the government of Cuba gave approval to its citizens who wish to engage in the fast rising crypto investments within its wall. The action was aimed at helping the country to bypass the strict embargo placed on it by the US. Cuba citizens learnt the benefits from cryptocurrency since they started trading when mobile internet was made available in the country.
Javeriana Cali, A Central Bank ex-economist who is now a teacher in Colombia, stated that the Central Bank must have seen that the adoption of digital currency will be of benefit to the country before it went ahead to formulate a legal framework that is crypto-friendly.
He continues that the action will help to cut down the cost of international transactions and also help to serve as a better option to dollars thereby alleviating the burden placed on the country due to its overdependence on dollars.
Cuba Might Be Inspired By El Salvador
In the previous year, the North American country launched its own Central Bank digital currency, CBDC . reports show that the nation’s president, Miguel Diaz-Canel is in support of the digital currency advancement and has been aiming to use it as a way to reduce its suffering from over-dependence on the dollar. Diaz-Canel explained that the nation’s regulators decided to invest in crypto as they see it as an escape route from the oppression of the US. dollars. He concluded that they wanted to join an economic scheme that does not focus on dollars for its foreign exchange model.
Many sources have been speculating that Cuba was inspired to take such actions by its neighboring country, El Salvador, that legalized crypto within its boundary in the previous year. Nonetheless, Cuba is yet to show signs of taking any further critical action on the issue. The announced license will keep controlling the activities of digital currency for the meantime.