Cuba’s Central Bank has approved BTC use and other cryptos in making payments in the nation. According to the country’s news outlet Presna Latina, Banco Central de Cuba has legalized the use of virtual currencies, implying that everyone within the jurisdiction of Cuba can now make investments and perform other commercial transactions with cryptocurrency. This came into effect on Wednesday, September 16.
The Central Bank first announced its plans to legalize cryptocurrency use and regulate the industry in August after it suspended cash deposits in the USD due to the tight restrictions placed by former United States President Donald Trump. Aljazeera reported that the North American nation would set up rules for digital currency transactions and business operations within the jurisdiction. Businesses interested in crypto-related services would be given licenses based on what they offer.
Reasons for the Cryptocurrency’s Adoption as Legal Tender
According to some sources, the move to use cryptocurrency in the country stems from the sanctions imposed on the nation by the U.S. The decision was widely accepted by the tech-inclined population, which further convinced the government that it was on the right track.
This September, El Salvador also adopted BTC as legal tender to avoid the entrapment of the U.S. El Salvador, like Cuba, is a struggling economy. The adoption of bitcoin as its currency will change remittances across Central America and improve its economy.
BCC Warns the Danger Associated with Digital Currencies
Despite adopting virtual currencies, the Cuban Central Bank warned that the risks associated with its use are enormous. The BCC disclosed that although crypto operations are outside the traditional banking system, digital assets still pose gargantuan risks and raise stability concerns. In addition, the BCC notified the public of the potential use of cryptos for illicit activities, such as money laundering, terrorism financing, guns and weapons trade, etc.
By embracing cryptocurrency, Cubans can enjoy remittances from other countries abroad without depending on transfer services like Western Union, which has left the country due to pressure from the White House. Recognizing digital currency will bypass U.S. sanctions and help it recover from the impact of the pandemic.
Over the past few years, the interest in crypto assets has risen tremendously. Cubans have identified various ways of attaining financial freedom, and with cryptos, they can finally achieve their goals. The adoption of cryptos could change the country’s virtual industry from a minor sector to one of the nation’s most significant sectors. Cuba joins El Salvador as the few countries to embrace cryptos as its currency.