As of late August 2021, Cuba became the latest in a line of nations to legally accept cryptocurrencies like Bitcoin into the folds of legal tender used for commercial transactions and investments. This monumental decision, called Resolution 215, provides rules and regulations for the operation of crypto exchanges and similar digital currency service providers in Cuba.
Though the Banco Central de Cuba (BCC) has made the decision, they have also done their very best to warn the local populace of the dangers associated with dealing in cryptocurrencies. The acceptance of crypto does not mean it will be regulated by the country’s banking system, which means there is no failsafe in place for people who want to go ahead and use Bitcoin.
However, fintech experts the world over are convinced that this is a strong move, both for the country and the status of cryptocurrencies everywhere. In a time when many countries in the region are suffering from US trade regulations, this decision is most welcome.
By embracing Bitcoin and other cryptocurrencies, Cubans have opened the door wide for easier remittance from international sources, despite financial hostility from the US. The embargo has kept Cuba’s economy largely isolated for decades, and the move towards crypto is a step towards the nation realizing a greater sense of financial freedom. Due to pressure from Washington, a lot of financial institutions like Western Union have up and left. As such, this decision will fill those gaps quite effectively.
In so doing, Cuba has followed in the footsteps of El Salvador, which became the first country to legalize Bitcoin as an official tender earlier this year. Beset by US sanctions and crippled by the pandemic, it was seen as a means of revitalizing the failing economy. The same applies to Cuba, where there has been a growing interest in cryptocurrency to make online purchases and investments.
This has opened up a whole new horizon for Cubans in the realm of online retail, meaning that these changes will be long-lasting and widespread. With both El Salvador and Cuba now opting for crypto, this is likely to inspire other big and small countries to open their borders and minds to new economic solutions and freedom.
Argentina and Venezuela are also likely candidates to dip their feet into the water of cryptocurrency. These states have had a long and tumultuous history with chronic high inflation and control over capital. If there is indeed a snowball effect due to the actions of El Salvador and now Cuba, then Latin America is poised to take charge in this brave new financial movement.
To Sum Up
However, just as the BCC said, enthusiasm needs to be tempered with caution. There are a lot of risks that come with the move. It is a highly volatile market, rife with chances of fraud, and only those who know what they are doing should be taking this risk. As the popularity of crypto in Cuba grows, it will be easier for every citizen to make the most of the system.