In many countries, the uptake of cryptocurrency and the Blockchain has been fast and extremely popular. Around the world, the increase in crypto adoption between 2012 and 2021 was considerable, sending the price of Bitcoin up by 540,000% in this time period. However, the same has not been true in communist countries, such as Russia […]
Which continents lead the way in crypto adoptions, and which are falling behind? Do continents display individual traits and characteristics? And is China pulling down Asia in the crypto race? North America is the world’s top crypto continent North America takes the top spot as the leading crypto continent in the latest 2022 Coincub world crypto […]
How can I trade Bitcoin and cryptocurrency in Cuba?
Cuba, in line with many small but ambitious economies, sees crypto and blockchain as a way of boosting its economy and keeping up with the progress of leading financial centers. As a result the country is belatedly, and perhaps reluctantly, reviewing its stance on crypto and is seeking to create something of a hub around digital assets. Cuba’s government now recognizes crypto as a means of payment (not yet as legal tender, however) and regulate it accordingly via the central bank which will set the parameters and guidelines for licensing providers of virtual assets services providers (VASPs) or any e organizations related to crypto. The official statement that regulating Bitcoin is in the interest of socio-economic development follows that of many other countries that basically can’t stop it anyway. Those VASPs and providers of related services will therefore now require an official license from the central bank.
Crypto development may have been hastened by the latest round of American sanctions, but the government is also keen to see what crypto adoption can bring to the country generally. Crypto will aid transfers of money between itself and the outside world for work done and products sold. As AML and Know Your Customer regulations tighten around the world – exchanges dealing through Cuba may face increasing hurdles, however.
As we have seen with all Coincub’s ranking countries, regulation, recognition and even taxation actually help promote confidence and boost a country’s crypto standing – so watch this space.
Tax on crypto
Cuba has only just moved from being an unregulated crypto economy and data on taxation is unclear. At present, there is no direct taxation policy for crypto gains, but it would seem likely – in view of a lack of clarity – that gains made from speculative trading with the aim of making a profit will be subject to standard Cuban income tax reporting requirements. Also, and in line with many other countries mooted as being crypto tax havens, it seems likely that businesses that use or trade cryptocurrency will be subject to prevailing corporate income tax, and companies are required to register their crypto operations including information on accounts, amounts, and transactions.
ICOS and start-ups
Initial Coin Offerings are not part of the scenery in CUBA, the unregulated and now regulated crypto economy is underdeveloped. However, technology is a great ‘frontier-crosser’ and there are strong signs that relations between the United States and Cuba are slowly progressing, despite the sanctions. American companies are keen to move into Cuba, but the technology infrastructure lags. However, start-up companies are developing across several sectors led by the global F6S startup community. As yet, Initial Coin Offerings to fund start-ups appear to be non-existent, and even in many developed countries are only just becoming part of the funding mainstream.
With crypto now legally recognized by the government and regulated by the central bank, Bitcoin and other cryptocurrencies can now be used for commercial transactions and investments in Cuba. This move to promoting a crypto economy might go against the grain but is gaining traction. The moves put in place by Resolution 215 of 2021 should see a growth of digital asset services and including crypto exchanges.
Crypto mining takes huge energy – which we all know – but Cuba remains poor and its energy infrastructure unable to provide sufficiently for the mining of Bitcoin – either legally or illegally. For a country that only gained internet less than four years ago, hi-tech mining in the country has some way to go yet.
Being able to send and receive money anonymously, and get around financial sanctions has been a reason for the growth of crypto takeup among the population. But new levels of regulation are now being legislated within the country, and the need for global exchanges to adhere to ever more stringent Know Your Customer requirements and Anti-Money-Laundering laws will no doubt drive the Cuban crypto-economy into line with the rest of the world.
At present the Cuban central bank has no plans to trial any form of central bank digital currency (CBDC) and the Government is still urging caution to citizens about the use of crypto along with warnings about fraud. Crypto remains an ambiguous subject by the state which neither strongly promotes or restricts it. The banking system is, therefore, bound to follow whatever crypto situation develops following new regulations and licensing of digital asset services providers.
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