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The Cuban regime has taken a step towards the legalization of internal transactions in dollars and other foreign currencies this Thursday, through the promulgation of the Decree-Law 113/2025 and a package of complementary resolutions from the Ministry of Economy and Planning (MEP) and the Central Bank of Cuba (BCC).
The new system, which will come into effect on December 17, 2025, establishes a legal framework for managing, controlling, and allocating foreign currencies within the national economy, opening the door to a partially institutionalized dollarization.
Although the authorities insist that it is a "transitory" measure, its structural scope and the level of regulatory detail suggest a lasting reconfiguration of the Cuban monetary system, which explicitly acknowledges the circulation of foreign currencies -such as the dollar and the euro- within national territory.
"This decree-law facilitates currency transactions in our country," explained Minister Joaquín Alonso Vázquez.
And he added: “We are not building capitalism with the partial dollarization of the economy; we are building a socialism with the characteristics of our country.”
A break from the "Monetary Ordering" model
The new legal framework breaks with one of the pillars of the "Monetary Regulation" of 2021, which had established the Cuban peso (CUP) as the only valid currency for all domestic transactions.
Now, the Central Bank itself will be able to authorize the use of other currencies as legal tender, while the MEP will have exclusive authority to decide who can operate in foreign exchange.
This represents an unprecedented relaxation of the national monetary system, where access to the dollar ceases to be a tolerated anomaly and becomes a privilege regulated by the institutions.
Key points of the new system
1. The use of the dollar and other currencies is authorized within Cuba
The Decree-Law empowers the Central Bank to recognize currencies other than the Cuban peso as legal tender, officially breaking with the principle of exclusivity of the CUP.
This legalizes the internal use of foreign currency, not only in state retail but also in economic relationships among authorized domestic actors.
2. The Minister of Economy may authorize transactions in foreign currency
The MEP will concentrate the power to approve foreign currency transactions within the country.
This centralization allows control over who can receive or make payments in dollars, under the pretext of "organizing the system for the management and allocation of foreign currency."
In practice, access to foreign currency becomes an administrative power rather than an economic right.
The ACAD: a new monetary rationing system
One of the main tools of the decree is the creation of the Foreign Currency Access Capacity Allocation (ACAD).
It is a mechanism that allows businesses and authorized individuals to buy foreign currency directly from the state using Cuban pesos, provided that there are available funds in the central treasury.
"This economic actor operates in Cuban pesos; therefore, when he receives that authorization, he must purchase those currencies," explained Juana Lilia Delgado Portal, president of the BCC.
The ACAD replaces accounts with liquidity capacity (CL) and is aimed at entities that do not generate foreign currency on their own but require it to fulfill strategic functions.
It is, essentially, a hard currency rationing system under ministerial control, and its use is non-transferable and temporary.
Legalization of foreign currency accounts for non-state actors
Another key development is the authorization of bank accounts in foreign currency for non-state economic actors, including:
-Micro, small, and medium-sized enterprises (MSMEs).
-Cooperatives.
-Self-employed workers.
-Artists, creators, and agricultural producers.
-Individuals with magnetic cards and access to foreign funds.
Valid income includes exports, e-commerce with payments from abroad, sales in MLC, international transfers, and donations.
These accounts can be used to import goods, pay for services, make withdrawals, or transfers, always under the control of the Central Bank and the MEP.
Mandatory currency retention: The state retains part of it
The system establishes that non-state entities will be able to retain a maximum of 80% of their foreign currency earnings, and must hand over the remaining 20% to the State, which will convert it to CUP at the official exchange rate (currently 1 USD = 120 CUP).
For certain types of income (such as donations or capital contributions), a 100% withholding is permitted, but this always depends on the source and the authorization of the economic plan.
This measure guarantees the State a share of all foreign currency circulating in the economy and strengthens its control over the flow of hard currency, even in the private sector.
Internal payments in foreign currency and legalized dual economy
The Decree-Law also legalizes payments in dollars or euros within the country, as long as the parties involved are authorized.
These payments are allowed:
-In the Special Development Zone of Mariel (ZEDM).
-In operations of retail and wholesale trading in foreign currencies.
-In commercial relationships between exporters and their domestic suppliers.
-In other specific cases approved by the MEP.
This consolidates the existence of two economic circuits within Cuba: one based on the Cuban peso, and another, more profitable and efficient, based on foreign currency.
The direct consequence is a segmented economy, where only those who have access to dollars can operate with flexibility and competitiveness.
Political justification: Socialism with dollars, but under control
Although the new system represents a clear opening, the official discourse insists on its temporary nature.
According to Delgado Portal:
"A timeframe is set because we have not given up on the goal of restoring a monetary environment where the Cuban peso is at the center of the monetary and financial system."
The legal framework invokes Article 4 of the Constitution to justify this measure as a way to "protect national interests" and maintain state control.
However, the decree does not establish any specific date or condition for reversing the measure, which suggests that the coexistence of currencies will be prolonged.
Real impact: Institutionalization of economic inequality
The entry into force of Decree-Law 113/2025 marks the formal institutionalization of partial dollarization in Cuba, which had already been taking place de facto since the creation of MLC stores.
However, the model is now legal, structured, and centrally managed.
The Cuban peso is relegated to domestic functions, lacking any real capacity to compete with the dollar as a unit of value.
Only authorized economic actors will be able to access foreign currency, creating a widening gap between those operating in the profitable economy and those who remain excluded.
Micro, small, and medium enterprises (Mipymes) or individuals without access to foreign currency will be marginalized, along with vulnerable social sectors that depend on the domestic market in CUP.
Conclusion: Managed socialism with the dollar?
The new system for managing, controlling, and allocating foreign currency reshapes the economic rules in Cuba.
It legalizes and regulates the internal circulation of the dollar, turns access to it into a state-managed good, and establishes a multi-currency framework where the CUP survives subordinated to foreign currencies.
Although presented as a technical tool to stabilize the economy, the decree represents a redefinition of the Cuban economic model: one where socialist planning coexists with the regulated use of the dollar, but without any real liberalization.
The medium-term challenge will be to achieve a balance between efficiency and equity in an increasingly segmented and controlled economy, where the dollar is no longer an anomaly, but rather a state policy.
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