On-shore VASP in Cuba

Resolución No. 215/2021 del Banco Central de Cuba (BCC)

Resolución No. 216/2021 del Banco Central de Cuba (BCC)

Requires service providers dealing with virtual assets to obtain a license from the BCC.

Legalizes the use of virtual assets for financial transactions between individuals and legal entities, but only those authorized by the BCC.

Prohibits the use of virtual assets that are not authorized by the BCC.

Overview: This is the cornerstone regulation specifically for virtual assets. It establishes the rules for the use of certain virtual assets in commercial transactions, their licensing, and supervision in Cuba. It defines virtual assets and virtual asset service providers (VASPs). It explicitly states that the BCC will grant licenses to VASPs that operate in Cuba. It also emphasizes that operations with virtual assets must comply with AML/CFT rules.

Identification and Verification:

Obtain and verify the identity of the customer and, where applicable, the beneficial owner. This includes:

For Individuals: Full legal name, date of birth, address, nationality, national identity number (e.g., ID card, passport), and occupation. Verification must be from reliable, independent sources (e.g., official documents).

For Legal Entities: Legal name, legal form, address of the registered office, names of directors/senior management, beneficial owners, and proof of existence (e.g., articles of incorporation, business registration certificate).

Ongoing Monitoring: Conduct ongoing monitoring of the business relationship and transactions undertaken by customers to ensure consistency with the VASP's knowledge of the customer, their business, and risk profile, including the source of funds.

Risk-Based Approach (RBA): Implement a risk-based approach, meaning that the intensity of CDD measures should be commensurate with the level of ML/TF risk identified.

Simplified Due Diligence (SDD): May be applied in low-risk situations.

Enhanced Due Diligence (EDD): Must be applied for higher-risk categories, such as:

Cuba does not have a distinct "crypto custodial license" in the sense of a specialized license solely for custody services.

Resolution 216/2021 initially authorized financial institutions to use virtual assets under BCC supervision with prior authorization, but subsequent implementation has moved to a concrete licensed framework where only 10 state-owned and mixed-enterprise firms have been granted licenses, excluding regular banks and non-bank financial institutions, and accompanied by new restrictive conditions including unilateral account freezing powers.

However, Resolution 215/2021 mandates that any legal person (entity) operating with virtual assets (which would include providing custody-like services) must obtain prior authorization from the Banco Central de Cuba.

There are no explicit crypto-specific rules mandating the segregation of client virtual assets from the operating assets of the custodian or the personal assets of the entity in the Cuban regulations (Resolution 215/216).

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There are no explicit mandates or requirements for cold storage (offline storage of private keys) in the Cuban regulations.

No, not the specific FATF Travel Rule. Cuba's primary regulation, Resolution 215/2021 from the Banco Central de Cuba (BCC), focuses on authorizing, licensing, and supervising VASPs within Cuba and requiring them to implement general AML/CFT measures. It mandates a risk-based approach, customer due diligence, and reporting of suspicious transactions. However, it does not explicitly detail the requirement to collect and transmit originator and beneficiary information for all VA transfers above a certain threshold, which is the core of the Travel Rule.

Since the specific FATF Travel Rule is not explicitly adopted, there are no defined threshold amounts for the collection and transmission of originator and beneficiary information on VA transfers.

Penalties for non-compliance with Cuba sanctions have been significantly increased under a May 2026 Executive Order and new sanctions on top Cuban officials.

Licensing virtual asset service providers (VASPs): Ensuring that entities dealing with crypto operate under state supervision.

Resolution 215/2021 initially authorized broad use of virtual assets under BCC supervision, but a March 2026 CiberCuba report indicates the BCC has since narrowed authorization to only a limited group of SMEs and one mixed company for cross-border payments, restricting the original scope.

Resolution 216/2021 (Gaceta Oficial No. 98 Extraordinaria de 2021): Establishes the licensing regime for Virtual Asset Service Providers (VASPs) operating in Cuba. These providers must obtain a license from the BCC to operate legally. This is where the primary regulatory oversight and potential for corporate taxation lie.

Businesses: If a licensed VASP or any other registered business engages in crypto trading as part of its commercial activity and generates profits, those profits would be subject to the general corporate income tax rate (Impuesto sobre Utilidades) applicable to businesses in Cuba, which is generally 35% for Cuban companies, with variations for foreign investment or specific sectors.

VASP Fees: If a licensed Virtual Asset Service Provider (VASP) charges fees for its services (e.g., transaction fees, exchange fees, wallet services), these fees would likely be subject to the existing service tax (Impuesto sobre los Servicios), typically at a rate of 10% (for state-provided services) or other applicable rates for non-state services, as they represent income from the provision of a service.

Lack of Transparency: The Cuban government is not known for its transparency regarding internal enforcement actions, especially against individuals or smaller, private entities.

Focus on Regulation: Cuba's primary public actions concerning crypto have been the creation of a legal framework to regulate virtual assets, aiming to harness them for economic benefit (e.g., bypassing US sanctions, facilitating remittances) while simultaneously controlling their use to prevent illicit activities and maintain state oversight.

Nature of the Economy: In a state-controlled economy, significant independent financial operations (like an unregistered crypto exchange) would likely be shut down or absorbed without a public trial or detailed announcement.