In a groundbreaking decision, the US government allows Cuban-based businessmen to open a bank account in the US. Reactions are mixed. For the first time since the “Revolution” in the 1950s, Cuban businessmen can open a US bank account and access it from Cuba.

As stated in a press release from the US Department of the Treasury, this change was decided in order to “promote Internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and expand access to certain financial services for the Cuban population.”

Cuba’s private sector has shown strong growth since the government in Havana recognized in 2021, for the first time, the legal status of small and medium-sized enterprises. Since then, more than 11,000 private businesses have been established, from small neighborhood shops to larger companies in the transportation and construction industries. And with the imports made by these companies, the level of goods on the island improved significantly.

A decrease in immigration is expected

The measures announced by the US the other day allow Cuban businessmen not only to open US bank accounts, but also to use US-based media platforms, online payment pages and cloud-based services, among others. Thus, they can, for example, in the future carry out monetary transactions through online platforms, which will greatly facilitate businessmen.

The new regulations also allow Cubans who develop software to have their apps available for download from Apple’s App-Store or Google’s equivalent, something also impossible until now.

The US Treasury Department is also reversing a Trump-era measure that barred US banks from processing transactions between Cuba and banks in third countries. These are “U-Turn” transactions. Cuban nationals will be able to make money transfers, as long as both the sender and receiver are not subject to US law. Of course, this implies that financing, investments and payments will still have to be done through third countries, because direct banking transactions with the USA are still prohibited.

“Supporting the Cuban private sector will help curb illegal immigration from the island over time, as people have more economic capacity,” said a US government official. Furthermore, in formulating the measures, a balance was sought between supporting the Cuban private sector and the desire not to benefit the Cuban authorities.

US business activities with the Cuban government and armed forces will remain limited. Cuban businesses with ties to the Cuban government will not benefit from the new regulatory framework either.

Reactions to the new measures

The American media reports that the package with the new measures was ready as early as September, but there were reactions in Congress. Republican congressmen argued that free business activity does not exist in Cuba, as the private sector is under state control.

Rep. Maria Elvira Salazar, originally from Cuba, criticized the measures, stressing in her post on X that “the Biden administration is now giving the ‘Cuban private sector’ access to the American financial system” and this “without any progress being made in how free the citizens are, while the practices of oppression have intensified.” Former Congressman Joe Garcia advocates for greater support for the Cuban private economy and has praised Joe Biden’s administration for that.

Cuban Foreign Minister Bruno Rodriguez also criticized the new arrangements as “limited”. “They do nothing to improve the terrible consequences and economic suffocation imposed on Cuban families through the implementation of the embargo and the inclusion of the country in the list of states that financially support terrorism,” the Cuban politician wrote in X. “The measures these are aimed at splitting Cuban society.”

Many remain cautious

Cuban economist Ricardo Torres from the American University in Washington described to DW the new regulations as a package of “positive measures” as they “are adapted to the different reality of Cuba.” Certain sectors, such as software development, are certain to benefit, Torres believes. Of course, the facilitation of financial transactions is also positive. “However, the intention is one thing and the practical application is another,” observes the expert.

The economist refers to the many limitations that still exist. Banks and businesses from the US will also want to be legally protected, as it is possible that the next US administration will not maintain the measures. That is why Torres believes that the implementation of the measures in practice will be quite limited.

A young businesswoman from Havana, who wants to remain anonymous, also reacts cautiously. He says that potentially opening US bank accounts and using online payment services would be “a big step”. But she also prefers to wait to see how the measures will be implemented in practice.

Edited by: Giorgos Passas