Cuba said this week it would authorize and regulate the use of cryptocurrency, a move that could help the Communist-run country skirt U.S. sanctions that have complicated transactions through the international banking system.
Cryptocurrencies, which allow financial operations to be carried out anonymously in a decentralized manner, have been used in the past to get around capital controls, as well as to make payments and transfers more efficient.
Cuba’s central bank can, for “reasons of socioeconomic interest,” authorize the use of certain virtual assets for payments and issue licenses to providers of services related to them, according to a resolution published in the official gazette on Thursday.
The bank warned that individuals undertook unauthorized operations with such assets at their own risk. In May it had alerted Cubans against a growth of Ponzi-like ‘investment’ schemes, including some using cryptocurrencies.
Interest in the use of cryptocurrencies in Latin America has been growing. El Salvador in June became the first country in the world to adopt bitcoin as legal tender. The first cryptocurrency ATM in neighbouring Honduras opened this week.
Inflation in Argentina and Venezuela has also spurred interest in digital currencies.
Cryptocurrency already had a fan base in Cuba as a way to get around the decades-old U.S. trade embargo that cuts Cubans off from conventional international payment systems and financial markets.
Some younger, tech-savvy Cubans have been buying digital currencies to make purchases online and to invest, while companies have offered to send remittances to Cubans through an exchange scheme involving cryptocurrencies.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.