Cuba is planning a transformation of its banking system that would allow the entry of new banks and financial institutions with private, foreign, and state capital, marking one of the most significant changes announced for a sector that has remained under almost exclusive state control for decades.
Alberto Javier Quiñones Betancourt, Vice President of the Central Bank of Cuba (BCC), explained that the goal is to move toward a "broader and more diverse" financial system, one that can incorporate new participants.
The proposal is part of the banking reform package presented this Tuesday during the official program Mesa Redonda and reported by Cubadebate.
According to the official, the new scheme includes banks and financial institutions with state, private, and foreign capital.
However, one detail does not go unnoticed: the opening would not imply a lack of controls. Any new participant would need to submit the required documentation, obtain a license from the Central Bank of Cuba, and subsequently be subject to its oversight mechanisms.
The influx of capital is not just seen as a source of financing.
In this regard, Quiñones noted that the investment could incorporate technologies, knowledge, and new management practices that would allow for an expansion of the financial product offering and modernization of the banking infrastructure.
The announcement elaborates on an openness that began to take shape in June, when among the 176 economic and social transformations presented by the Government, the inclusion of private banking, virtual assets, currency reforms, and private exchange houses emerged.
The package also included a greater participation of private and foreign capital in other sectors of the economy.
One day before the formal approval of that package, it had already been reported that Cuba authorized the participation of private banking for the first time in decades.
Among the announced measures were non-banking financial institutions with national or foreign private capital, as well as changes to facilitate microcredits, foreign currency accounts, and financial technologies.
Now, the Central Bank proposes that opening and capitalization be one of the four major fronts of the reform.
The other three encompass credit, savings, and financing; innovation and new service channels; and the foreign exchange market and remittances.
As part of the restructuring, the BCC is also working on the creation of the Development and Agricultural Promotion Bank, which according to Quiñones is in its final stages and will primarily focus on financing agricultural production and food.
At the same time, the authorities intend to expand the use of credit in the economy.
The Central Bank acknowledged that the current supply does not sufficiently address the diversity of businesses and individuals, and announced that it is working on, among other products, a future consumer credit, the details of which have not yet been disclosed.
A new mechanism for interest rates is also being developed, which would grant greater autonomy to commercial banks to design their offers, with the aim of stimulating savings and allowing for differences among institutions competing to attract resources.
The financial opening also coincides with other recent changes aimed at facilitating transactions in foreign currency.
Since September, new resolutions allow for opening accounts in foreign currencies without prior authorization from the Central Bank and expand the possibilities for making payments abroad, receiving cash in dollars and euros, and managing income in foreign currency.
The legislation on foreign investment was also modified. Decree-Law 128 expanded access for joint ventures and investors to international banks, allowed for the operation of accounts abroad, and relaxed aspects related to the hiring of workers and the allocation of profits.
In the currency exchange market, the opening has already begun to materialize. The first private exchange house was announced as a pilot project in July and is currently operating in Santa Clara under the supervision of the Central Bank.
The authorities assert that there are other requests to create similar entities.
The financial plan also includes new fintech figures, an update to cryptocurrency regulations, projects related to artificial intelligence, new digital solutions for remittances, and a future platform for the currency auction.
Todo ocurre mientras el Banco Central intenta, al mismo tiempo, recuperar las funciones del peso cubano como medio de pago, unidad de cuenta y reserva de valor, después de años de inflación, depreciación y pérdida de confianza en la moneda nacional.
The extent of that deterioration was reflected this Tuesday with the introduction of new 10,000 and 20,000 Cuban peso bills, which the BCC justified by the level reached by prices and the needs of monetary circulation.
The announced reforms thus create an unprecedented scenario for Cuban banking: the State would maintain regulation and oversight of the system, but would share space with new private and foreign participants, while trying to attract capital, expand credit, and restore some of the functionality lost by financial institutions.
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