On Thursday, the Cuban government said it would “recognize and regulate” Bitcoin and other cryptocurrencies for payments on the island, Bloomberg reported.
The local Cuban gazette published a resolution stating that the central bank will establish rules for Bitcoin and other crypto assets in order to establish licensing laws for crypto service providers on the island.
The resolution said the central bank had the power to authorize the use of Bitcoin and other cryptocurrencies on “grounds of socio-economic interest,” the report said. The resolution also states that the state will act as control over the bank’s operations and prevent the use of Bitcoin for “illegal activities”.
Because of the strict embargo rules in Cuba, it has become difficult to use dollars, and as a result, Bitcoin has grown in popularity among tech-savvy Cubans.
A local programmer told Bloomberg that some Cubans are already using crypto in conjunction with gift cards to make online purchases.
The announcement comes just 10 days before El Salvador will be the first country to adopt Bitcoin as a legal currency to remove the fees and dangers of sending cash transfers, a staple of both economies.
It remains unknown how Cuba’s central bank will choose to regulate Bitcoin, as the only real control it can exercise over the permissive, immutable, unstoppable currency is to regulate exchanges and make it difficult for citizens to access common on ramps and off-ramps, although not impossible.
Bitcoin regulation could be the result of the government’s realization that people are using the currency to bypass U.S. restrictions on sending money to Cuba.
Read Alex Gladsteins: In Cuba’s Bitcoin Revolution