El Salvador is the first country in the world to recognise Bitcoin as legal tender alongside the US-Dollar. When president Bukele announced this in June 2021, the whole Bitcoin community was more than excited. Now another country seems to take a step towards crypto adoption. But is this the case, or why is Cuba regulating cryptos?
Bitcoin is important in Latin America
While many people in Western countries are looking at Bitcoin to increase their wealth and speculate on the price development, BTC has an entirely different use case in most Latin-American countries. Many countries in this particular region struggle with economic issues. Sky-high inflation is very common, and corruption and unstable political situations are also occurring more often.
In effect, most people in this region are more dependent on the US-Dollar, because it provides a stable value than the respective native currencies. But the access to foreign currencies is getting more challenging in many of these countries, partly because governments try to restrict the access to stabilise the already deadlocked situation.
Bitcoin, on the other hand, is peer-to-peer and allows people even in the most struggle ridden areas to achieve economic independence from the unfortunate conditions that they have to endure.
Will Cuba adopt Bitcoin?
While Bitcoin plays an important role in Cuba, the government is not planning any such thing soon. The regulation aims to bring supervision to the markets, equipping the central bank with the authority to grant licences to companies and financial service providers in the future.
This is something we have witnessed in a lot of different countries. A regulated market is a more secure environment for investors. With the Cuban take on regulating cryptos, Bitcoin will not become legal tender, but there will be rules for using BTC for payments or general transactions.
No restrictions are imposed, and people get to decide whether or not they will use Bitcoin. So while Bitcoin does not become a legal tender in Cuba yet, being recognised is still positive. It might also have a positive effect on other countries in that economic area. It was only recently when the Argentinean president made positive remarks about Bitcoin. It is not unlikely that we will witness one nation after another recognising Bitcoin and making it more accessible for their citizens.