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Cuba will recognize cryptocurrencies citing "reasons of socioeconomic interest."

Cuba will recognize cryptocurrencies citing “reasons of socioeconomic interest.”

Resolution 215, which was published in the Official State Gazette on Thursday, indicates that the Bank Central will establish new rules on how to deal with digital currencies. Commercial providers of related services will now need to obtain a license from the central bank to continue operating.

The US embargo against the communist state has turned Cuba into an outcast of the world economy. Cuba’s decision to join El Salvador and adopt a decentralized virtual currency could help the country circumvent the United States sanctions regime, which was strengthened under former President Donald Trump and extended during the term of President Joe Biden.

It is historical that they kiss herSaid Boaz Sobrado, a London-based fintech data analyst who spent four years working on crypto in Cuba.

It is a conservative government that still sticks to traditional Marxist methods. In fact, Che Guevara founded the central bank of communist Cuba. The fact that they regulate wisely shows that they are interested in what you can do for themBoaz said.

Envoyer et recevoir de l’argent entre les États-Unis et Cuba est devenu extremely difficile sous l’administration Trump, selon le Dr Mrinalini Tankha, professor d’anthropologie à l’Université d’État de Portland, qui fait des recherches sur Cuba Since 10 years ago.

In 2020, Western Union, a particularly important remittance channel that had operated in Cuba for more than 20 years, closed its more than 400 locations, amid the increasingly aggressive sanctions of the time. Trump.

The process of entering and leaving the country has been further complicated by the Covid-19 pandemic.

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Before the Covid epidemic, Tankha says, some Cubans turned to clandestine and somewhat semi-formalized courier services called mules, where agencies transported cash to Cuba and distributed it to the island’s people. But when the pandemic caused flights from around the world to stay grounded, even that way of getting money became much more difficult, he explained.

It is this desperate need for cash, amid a global pandemic and blocked access to the global economy, that has helped instigate a surge in cryptocurrency adoption in Cuba, experts say.

There is a kind of niche sector of people who have turned to cryptocurrencies.Tankha said.

She credits the burgeoning crypto community with the rise of the Internet in Cuba, as well as the fact that there are many more people who have smartphones and 3G connectivity. The weakness of the local currency is also a factor that is likely to contribute to the attractiveness of the bitcoin.

The cryptocurrency use case in Cuba goes beyond transferring money across borders. They are also Cubans looking to unlock their income-generating potential.

If you’re a software developer or NFT artist, you can get paid in crypto for your work, and I think that’s where the potential lies.Tankha said. “This opens up an entirely new economy in which Cubans can participate.“.

That is exactly what photographer Gabriel Guerra Bianchini does. Based in Havana, Bianchini was one of the first Cuban artists to enter the world of NFT.

My first job sold in six days for 1.6 etherealBianchini said. “It is more important than just making money. It really is freedom.

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However, receiving funds, even through crypto channels, requires a bit of creativity, as many exchanges require “fulfillment.”know your customer“.

At the moment when Cubans participate in this ecosystem, they face many risks, even if they are operating with a VPN where they can hide their location.Tankha said.

Tankha told CNBC that many exchanges, including those that are not based in the United States, continue to geographically block Cubans.

Experts said that there is still a long way to go for the mass adoption of cryptocurrencies in Cuba.