With the publication of Central Bank of Cuba (“BCC”) Resolution 215 in August 2021, the Caribbean island joined the small group of jurisdictions that have established a specific legal framework for virtual assets (“VA”)[1] and virtual asset service providers (“VASPs”).
As this regulation emanates from the country’s highest banking authority — responsible, under the law, for ensuring the purchasing power of the national currency and for regulating and supervising the functioning of the money, foreign exchange, and payment systems in Cuba[2] — it was inferred that its main purpose would be to control the effects of the use of VAs and the activity of VASPs on the Cuban banking and financial system[3].
Indeed, Resolution 215/2021 acknowledges the existence of VA and VASP operations outside the banking and financial system, while also recognizing their risks for monetary policy and financial stability in the country[4]. For this reason, it establishes the framework for regulating the use of VAs in commercial transactions and for granting licences to VASPs for operations related to financial, exchange, and payment activities in and from Cuban territory. These provisions essentially mean that the BCC reserves the power to authorise the use of VAs on a case-by-case basis and to issue licences to VASPs, thereby embedding the crypto sector within the pre-existing domestic banking and financial regulatory framework.
In this sense, VASPs would fall among the entities that, while not organically integrated into the Cuban banking and financial system — as they are not registered in the Registry of Financial Institutions and Non-Financial Entities under the BCC — must nevertheless comply with domestic banking and financial regulations and obtain a BCC licence defining the scope and conditions of their authorised activities.
In this regard, the BCC issued Resolution No. 89 of 12 April 2022, which establishes the specific requirements for the authorisation, financing, regulation, supervision, oversight, correction, and eventual revocation of VASP licences operating in or from Cuban territory.
Under this regulation, the criteria considered by the BCC when evaluating VASP licence applications include the legality, timeliness, and socio-economic interest of the initiative, the characteristics of the project, the applicants’ responsibility, and their experience in the field. Thus, although holding equivalent licences in other jurisdictions where applicants are registered or operate is a relevant factor, the State’s interest in approving projects deemed beneficial for the Cuban financial system may prevail over such criterion.
Among other key aspects of Resolution 89/2022, it is established that:
- the granted licence must specify the characteristics of the VAs, as well as the conditions and restrictions of the authorised operations, and the measures to ensure control and custody of VAs;
- the licence is granted for a renewable period of one year;
- the applicant must submit to the BCC, among other documents:
- its risk disclosure and responsibility policies;
- its procedures on anti-money laundering (AML), counter-terrorist financing (CTF), and counter-proliferation financing.
Once authorised by the BCC, VASPs become obliged entities under Decree-Law No. 317/2013 “On the prevention and combating of money laundering, terrorist financing and proliferation financing of weapons of mass destruction” and its complementary regulations, and must register in the Registry of Obliged Entities under the General Directorate for Financial Operations Investigation of the BCC.
In addition, VASPs must:
- account for their operations in accordance with Cuban accounting standards issued by the Ministry of Finance and Prices (“MFP”), specifically adapted for such assets through MFP Resolution 268 of 2023;
- operate only with the VAs approved by the BCC in the licence itself;
- comply with reporting requirements, internal control standards, risk management rules, and any other provisions established by the BCC.
Putting this regulatory framework into practice, to date the BCC has granted only one VASP licence: to the Lithuanian company EBIORO UAB, through Resolution No. 8 of 27 January 2025, effective as of 26 February of the same year, which authorises it to:
- collect, pay, and carry out foreign exchange operations to and from the national territory, including the development and management of digital platforms for these purposes;
- exchange virtual assets and legal tender currencies, including fiat and digital currencies;
- custody or manage virtual assets and instruments enabling their control, including wallets and digital accounts operated on VASP platforms.
It is noteworthy that the resolution does not specify which VAs EBIORO UAB is authorised to operate with, nor does it establish specific parameters for their determination, as required by Resolution 89/2022. This exposes the VASP to potential subsequent restrictions on the assets used or planned for its activity.
As a condition for operating, the licence requires the VASP to disclose, on its website and other service channels, information about the risks associated with VA operations, including at minimum and in a clear manner:
- that VAs are not legal tender and are not backed by the BCC;
- their volatility;
- the irreversibility of transactions once executed;
- cyber, technological, and fraud-related risks inherent to VAs.
In this declaratory manner, the BCC seeks to distance the Cuban banking and financial system from any risks arising from the VASP’s operations, despite having assessed the legality and characteristics of the initiative when granting the licence.
However, neither Resolution 89/2022 nor the licensing resolution impose objective limitations, conditions, or safeguards, nor do they establish control and custody measures that effectively protect consumers and the financial market from the aforementioned risks.
In this regard, while there is an obligation to warn about risks associated with cryptoassets, there is no requirement to provide clear, accurate, and non-misleading information about the provider itself, its services, or the assets and products it manages.
Nor is there any obligation to segregate client assets from the VASP’s own funds, or any prohibition on using client VAs for the provider’s own purposes. Likewise, no minimum capital requirements, deposit guarantee funds, or liquidity buffers are established to cover potential losses or claims against the VASP. There is also an absence of requirements to provide accessible and effective complaint mechanisms or to manage potential conflicts of interest.
These safeguards, recognised in several international regulatory frameworks such as the EU Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA), would be particularly relevant in the Cuban context, as the current legal framework lacks effective substantive and procedural rules to adequately protect consumers in cases of VASP insolvency (such as bankruptcy or payment suspensions).
As this is the first authorisation granted by the BCC in this emerging field, such regulatory gaps are understandable. The explicitly experimental nature of these licences, with a validity period of one year, also suggests that Cuban authorities are only beginning to approach a sector characterised by complexity and rapid evolution.
So far, the practical effects of these regulations have been limited, and it is therefore advisable to monitor future regulatory developments and the potential issuance of new VASP licences.
In a country such as Cuba, whose banking and financial system faces significant constraints in accessing traditional financial channels due to the U.S. sanctions regime, cryptoassets are emerging as a viable alternative. Their legal recognition and regulation, although still in an early stage, reveal the strategic potential of this sector in the Cuban market.
Dávalos Abogados will continue monitoring and analysing developments related to this topic of current relevance and interest for Cuban and international business stakeholders.
If you would like to obtain further information or make any inquiry, please do not hesitate to contact us.
CONTACT PERSON
Lourdes Dávalos León
Managing Partner
+34 689 594 350
lourdes@davalosabogados.com
[1] The regulation uses the generic term “virtual asset,” defined as a “digital representation of value that can be traded or transferred digitally and used for payments or investments.”
[2] The mission, functions, and powers of the BCC are established in Decree-Law No. 361/2018 on the Central Bank of Cuba, published in Extraordinary Official Gazette No. 58 of 12 October 2018.
[3] The Cuban banking and financial system, according to Decree-Law No. 362/2018 on Institutions of the Banking and Financial System, includes “financial institutions and representative offices of foreign financial institutions licensed by the Central Bank of Cuba, as well as non-financial entities that provide support services to financial institutions, collection or payment services in the national territory, previously authorised by the Central Bank of Cuba.”
[4] According to the fifth “WHEREAS” clause of the regulation: “due to their high volatility and being conducted in decentralized data networks in cyberspace, generally without emission control, regulation, official supervision, sanctioning regime, or backing from monetary authorities, which also implies risks of being used to finance criminal activities, given the excessive anonymity of registered users in such networks and of the transactions derived from their use.”