Cuba: Central Bank Issues Directive on Cryptocurrency

cuba:-central-bank-issues-directive-on-cryptocurrency

On August 26, 2021, Cuba’s government published Resolución 215/2021, a directive issued by its Central Bank that establishes guidelines applicable to the use of virtual assets (such as cryptocurrency) in commercial transactions and to the licenses that may be issued to providers of services pertaining to such assets

The directive explains in its preamble that virtual assets are used outside of traditional banking and financial systems in an unregulated manner, which causes risks to financial and monetary stability due to their high volatility. In addition, such assets may be used for criminal activities due to the anonymity that they afford to their holders, which, according to the resolution, is the reason that led Cuban authorities to regulate cryptocurrency transactions.  

The directive defines virtual assets as the digital representation of value that can be commercialized or transferred digitally and used for payments or investments. It also defines providers of virtual assets as any individual or company that is engaged in certain cryptocurrency transactions, including:

  • The exchange of virtual assets to legal tender.
  • The exchange between one or more types of virtual assets.
  • The transfer of virtual assets.
  • Custody or administration of virtual assets.
  • Providing financial services related to the sale of a virtual asset.

The Central Bank has the authority to grant licenses to providers of these types of services. It also has the authority to issue regulations aimed at preventing virtual assets transactions from being used to finance operations related to money laundering, terrorism, and proliferating weapons of mass destruction.

Notably, the directive provides that Cuban government agencies may not use virtual assets in commercial, financial, or payment transactions, unless the Central Bank grants authorization to do so.