Photo by Art Rachen
3rd May 2022
Cuba’s Central Bank (BCC) has published a decree law that establishes the procedures that those providing virtual assets (cryptocurrencies) must comply with to operate legally in the country. The regulation follows another gazetted last year which established a general framework (Background Cuba Briefing 6 September 2021).
The new law makes clear the basis on which individuals and companies will be able in future to operate cryptocurrency exchanges and custody services. It confirms that the BCC is the only institution able to approve virtual asset service provider licenses to individuals or companies. The Bank will also be responsible for evaluating the legality, opportunity, and socioeconomic interest of any proposal, along with assessing the probity of the applicant, and their experience.
The regulation requires all license holders to comply with BCC rulings in relation to the prevention, detection, and combating of money laundering, terrorism financing, weapons proliferation, and other similar concerns. An application will require the approval of the General Directorate of Investigation of Financial Operations of the BCC.
Significantly, in relation to how cryptocurrencies may be bought, sold, or used in Cuba, the BCC said that it will determine which cryptocurrencies or digital assets can be listed on Cuban exchanges through the provision of the license.
Licenses will be approved for a period of one year, extendable for a second year, given the experimental and innovative nature of this type of activity, the Bank said, and only after consulting with a seemingly new body, the ‘Grupo de Criptoactivos’. Anyone holding a licence for existing crypto currency operations outside Cuba, whether a Cuban or a foreigner, must apply for a licence to operate in Cuba.
Exceptionally, in the case of state interests, the BCC can grant a license without the entity having to meet the requirements. In addition, virtual asset service providers will not be allowed to cease their operations without authorisation from the BCC. The new regulation also defines the activities that virtual asset service providers may engage in.
Violation of the regulation’s provisions, of complementary regulations, or the license granted, and those operating without a license will incur ‘a punishable administrative liability’.
Last August the BCC gazetted a resolution establishing rules for the use of cryptocurrencies. This made clear that the BCC, “for reasons of socioeconomic interest,” may agree to “the use of certain virtual assets in commercial transactions and grant a license to virtual asset service providers for operations related to financial, exchange, and collection or payment activity’ in and from Cuba.”
Taken together the two regulations suggests that Cuba is moving towards the wider use of cryptocurrencies, possibly in response to the direct and indirect impact of US sanctions on international financial transfers and many financial institutions unwillingness to manage remittances and other payments to Cuba. The popularity of cryptocurrency has recently grown in Cuba in response to the difficulty of sending remittances from the US to the island. Among the most popular crypto currencies in use are Bitcoin, Ethereum Litecoin, and USDT.
The new regulation can be read in Spanish at
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