The Cuban Central Bank has issued new regulations designed to address runaway inflation and the large off-the-books economy that has developed in the midst of the country’s economic crisis.
The regulations, which went into effect Thursday (Aug. 3), put a limit of 5,000 pesos on cash transactions between state and private businesses and bans those organizations from using ATMs, encouraging the use of an electronic form of payment, Reuters reported Thursday.
The Cuban government has pegged the dollar against the peso at a rate of 24 to 1, with higher rates for select companies, tourists and residents, according to the report. However, the dollar trades for 230 pesos on the informal market. Inflation is running at 45% so far this year.
The Cuban economy is also facing a number of other challenges, the report said. Economy Minister Alejandro Gil stated, per the report, that gross domestic product (GDP) grew 1.8% in the first half of the year, but remained 8 percentage points below where it was in 2019, before the pandemic.
The country has seen shortages of food, medicine, fuel and other basic goods, as well as long lines to buy them when they are available, according to the report.
The lack of confidence in the government-run banking system has led to limited cash in certain ATMs, leaving some Cubans unable to access the money they need, the report said.
The new regulations from the Cuban Central Bank are intended to address this issue and promote the use of electronic payments rather than cash transactions, per the report. The regulations say that “collections and payments between economic actors are not on a cash basis … but carried out electronically.”
Another crackdown on the cash economy took place earlier this year in Nigeria. The country said in January that it would ban cash withdrawals from government accounts from March 1.
Modibbo Tukur, the chief executive of the Nigerian Financial Intelligence Unit (NFIU) said at the time that the move was part of efforts to tackle money laundering, Bloomberg reported Jan. 5.
In March, it was reported that a cash shortage in Nigeria had made the country’s digital currency much more popular. The eNaira emerged as the electronic payment channel of choice, Bloomberg News reported at the time.