Cuba lays groundwork to legalize cryptocurrency transactions

By Michael McDonald & Ezra Fieser

Cuba’s communist government is trying to legalize and regulate the growing use of cryptocurrencies on the island as citizens ramp up transactions to evade state controls.

The Central Bank said Friday that it’s drafting rules for the legal use of such currencies in commercial transactions, and to issue licenses for providers of services connected with virtual assets. Bitcoin, Ethereum, Litecoin and Tether are already the most commonly used digital currencies on the island, the bank said.

Citizens in countries with high levels of capital controls and inflation often prize such digital assets for their independence from state curbs, and as a vehicle for dodging foreign currency rules to move and save money abroad.

The bank cited “insecurity and risks that are conducive to fraud” when dealing in digital currencies and said users “must assume the risks and responsibilities that, in civil and criminal terms, are derived from using virtual assets.”

El Salvador will adopt Bitcoin as legal tender alongside the dollar next month. The use of crypto has also grown in countries like Venezuela and Argentina with chronically high inflation rates and capital controls.