Cuban Central Bank is the latest regulator to issue guidelines on how businesses and VASPs can obtain crypto licenses to operate within the jurisdiction. According to the announcement made in the country’s official newspaper, those who want to trade virtual currencies or operate a crypto-based business are mandated to obtain a minimum of one-year validity period.
Businesses also have the option of extending their validity period to two years. However, a business or VASP will only be granted an operating license based on legal grounds, economic benefits, and the nature of the project. The government assured individuals and VASPs that issuance would not be restricted to domestic VASPs only.
The license will give crypto-based organizations the go-ahead, provided they do not engage in operations involving traditional assets and commodities like securities, stocks, and fiat. Once approved, service providers will continue to operate throughout the validity period. Violating the license will attract severe penalties that could affect the administrative and financial structure.
Cuba is Relishing the Moment with Crypto
Cuba is one of the countries globally that wholeheartedly embraced virtual currency ever since it emerged. The government gave the nod to the industry last year and sought to find the best way to take advantage of it without harming Cubans.
Last year, Cuba approved using virtual currency to evade the severe financial embargo placed by the U.S. Thanks to crypto, the government brought in mobile internet. Cubans were also enlightened about the benefits of digital currency to facilitate use.
Former economist Javeriana Cali said creating a flexible oversight framework means the government has embraced the benefits of cryptocurrency. He said the government’s approach would cut the cost of international transactions by a significant number and provide an alternative way to transact aside from the dollar.
Cuba Could Follow in the Footsteps of El Salvador
Cuba has taken giant strides in easing crypto adoption, thanks to President Miguel Diaz-Canel. The President is a strong crypto advocate who sees digital currencies as a means to end Western oppression.
In 2021, the nation launched its electronic money. Currently, the government is planning to acquire cryptocurrencies. However, the financial regulator and other monetary agencies would have to study the pros and cons.
There’s a widespread rumor that the Central American nation could become the second country after El Salvador to adopt BTC as legal tender in the region. Their neighbor made BTC their official currency in September 2021. However, the Latin nation is yet to make any significant progress following the postponement of the BTC bonds sale.
For now, the Cuban government will focus on creating a working and flexible framework to regulate crypto operations in the nation.