In an effort to control inflation, off-the-books business, and tax evasion amid a current economic crisis, this week the Cuban Central Bank banned state and private businesses from using ATMs, and has also placed a legal limit on the size of cash transactions.
Government officials said that the new restrictions, which came into force this week and will be implemented gradually over six months, limit cash transactions to 5,000 pesos, equaling $208.
From now on, said Alberto Quiñones Betancourt, vice president of the institution, in statements reported by the official press, “all collection and payment relationships between economic actors must be based on the payment methods established by the BCC, prioritizing electronic channels.”
Among the measures, which will also be published this Wednesday in the Official Gazette, is the prohibition on “economic actors” — that is, private companies — withdrawing money from their fiscal account. For these companies the daily maximum allowed in each banking operation is 5,000 pesos.
Only cards “associated with pensions, savings accounts, salaries, bonuses, etc.” may be used at ATMs, that is, from natural persons.
In addition, the obligation is established that all businesses that provide goods and services have “electronic means of payment” and that private companies have contracted “the services of the payment gateways or POS.”
One of the premises of the new measures, they concede, is “to encourage the use of bonuses.” For example, this Wednesday, before the BCC issued its statement, the telecommunications monopoly, ETECSA, announced a 10% savings “by paying for telecommunications services through Transfermóvil.”
During an appearance on the Cuban television program Roundtable, Joaquín Alonso Vázquez, minister-president of the bcc, referred to the advantages of what he defined as a “gradual process”, which aims to benefit the population and the different actors in the national economy by gradually moving towards a cashless society,
The UK, for example, has already initiated such moves and visitors to that country will find that many businesses such as restaurants or transportation services will not even accept cash any more.
Although cash has been king for thousands of years, its reign may be coming to an end.
In this sense, he pointed out that payment through electronic channels implies, first of all, security.
“If you go down the street and lose your purse or wallet, you also lose your money.
“On the other hand, if you lose your card, since you keep your pin, you just go to the bank and get it all back.”
The official affirmed that the use of technology also means savings and efficiency, not only because of the bonuses that the one who pays receives, but, on the other hand, the one who collects avoids the need for an ATM, counting the money and fill out forms.
Similarly, this Tuesday, the state corporation Cimex reported that from September 1 to October 31, it will “gradually” eliminate cash payments at gas stations in the country.
While the government pegs the US dollar at 24 pesos and for select companies, tourists and residents at 120 pesos, the US dollar is currently worth 230 pesos on the black market.
An official statement made by Communist authorities this week said that they are working to curb inflation, which is currently at 45 percent, as well as control the devaluation of the peso by promoting “banking” in the country and encouraging the use of “electronic payments.”
In July, Economy Minister Alejandro Gil said Cuba’s gross domestic product rose 1.8 percent in the first half of 2023, but it remained at 8 percentage points below pre-pandemic levels in 2019, causing shortages of food, medicine, fuel and other basic goods.
The crisis has led to a lack of confidence in the state-run banking system, resulting in a lack of cash at some ATMs, due to their use by businesses.
“Collections and payments between economic actors are not on a cash basis, but carried out electronically,” which has become the stated goal of the new restrictions.
Sources: Translating Cuba.com, Jamaicaonline.com, Granma.
