Cuba to recognise and regulate cryptocurrencies

On August 26, 2021 Government of Cuba announced to recognize and regulate cryptocurrencies for payment in the Island nation.

Highlights

  • This decision was taken following the popularity of cryptocurrencies increased among a technologically savvy group in Cuba as it became harder to use dollars.
  • As per officials, Central Bank will set rules for such currencies. It will also determine how to license the providers of related services in Cuba.
  • Cryptocurrencies are used for long-distance transactions and are supposedly anonymous. Thus, they are often popular among people who are attempting to evade government regulations.

Other country to recognise cryptocurrencies

The Central American nation of El Salvador also recently announced to recognise the use of cryptocurrency Bitcoin because it is a way to encourage remittances from its citizens who are living abroad. El Salvador announced on June 9, 2021 to adopt Bitcoin as legal tender. It became the first country worldwide to take this step.

About cryptocurrencies

Cryptocurrencies are binary data that are designed to work as a medium of exchange. In such exchange, individual coin ownership records are stored in a ledger in the form of computerized database. A strong cryptography is used to store the database in order to secure transaction records, control the creation of additional coins as well as to verify transfer of coin ownership. It does not exist in physical form like a paper money and is not issued by any central authority. Cryptocurrency is minted or created prior by a single issuer. So, it is generally considered as centralized.

Bitcoin

Bitcoin is the first decentralized cryptocurrency, released in 2009.

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