Cryptocurrency Regulation in Cuba Prior to 2024

Before 2024, Cuba’s approach to cryptocurrency regulation was in a nascent stage, marked by a mix of increasing usage and lack of formal governmental regulation. This situation presented a complex environment for the burgeoning cryptocurrency community in the country.

Growing Popularity Amidst Ambiguity

The use of cryptocurrency in Cuba was on the rise, with platforms like Qbita and BitRemesas facilitating the exchange of digital currencies. However, the exact extent of cryptocurrency use in Cuba was not well-documented, with reports suggesting a small but growing community. The increasing trade volume on platforms like Qbita in 2020 indicated an upward trend in the adoption of cryptocurrencies in the country​​.

Government’s Stance and Regulatory Inaction

Despite the growing popularity of cryptocurrencies, the Cuban government had not established any formal regulations for this emerging technology as of that time. Cryptocurrencies were neither legally recognized nor explicitly banned. Cuban authorities, including President Miguel Díaz-Canel, had acknowledged the potential of cryptocurrencies in various contexts, indicating a positive but cautious interest in this technology. Notably, discussions about using cryptocurrency for national and international commercial transactions were underway, reflecting the government’s recognition of the potential utility of digital currencies​​.

The Central Bank’s Directive

A significant development came on August 26, 2021, when the Cuban government published Resolución 215/2021, a directive by the Central Bank establishing guidelines for the use of virtual assets in commercial transactions. This directive identified virtual assets as digital representations of value used for payments or investments and outlined regulations for various cryptocurrency transactions and services. The Central Bank was authorized to grant licenses to providers of these services and issue regulations to prevent virtual assets from being used in activities like money laundering or terrorism financing. Notably, the directive restricted Cuban government agencies from using virtual assets in transactions unless specifically authorized by the Central Bank​​.

Challenges and Warnings

Despite some favorable views on cryptocurrencies, the Cuban government had issued warnings about their use, highlighting the risks of fraudulent schemes disguised as legitimate cryptocurrency investments. The lack of promotion or endorsement by the state added a layer of caution to existing cryptocurrency operations in Cuba​​.

Uncertain Future Regulatory Framework

The future regulatory framework for cryptocurrency in Cuba remained unclear. While the government indicated a willingness to study the implications of implementing cryptocurrency, there was no definitive indication of whether digital assets would be formally adopted or whether a dedicated bank addressing digital currency would be established. As cryptocurrency use continued to grow on the island, the need for further regulatory clarity and guidance from the government and the Central Bank became increasingly important​​.

In summary, prior to 2024, Cuba’s cryptocurrency landscape was characterized by growing usage, cautious government interest, and an emerging but still undeveloped regulatory framework. The directive issued by the Central Bank marked a step towards regulation, but the overall approach remained cautious and evolving.