Cuban banks and other financial institutions will cease accepting US dollars on June 21, due to the United States government tightening the embargo restrictions on US and foreign banks.
Cuba has found it increasingly difficult to redeem US dollars abroad as a result of additional restrictions imposed by former US president Donald Trump’s administration — which have not been reversed by president Joe Biden.
According to the Central Bank, at least 24 banks have stopped doing business with Cuba since Trump tightened the embargo on Cuba.
The Cuban government said the move is “temporary”. Just how temporary remains to be seen.
“In view of the obstacles that the US embargo creates for the national bank system to deposit abroad the US dollars that are collected in the country, a decision was made to temporarily suspend deposits in US banknotes in Cuba’s bank and financial system,” said the Banco Central de Cuba.
Suspending cash deposits in US dollars is seen by the Cuban government to be necessary in order to protect the local financial system.
Cuban and foreign bank account holders in Cuba have until June 21 to deposit dollars in their accounts.
Bank transfers will continue to be accepted and account holders will be able to withdraw funds from their dollar accounts, the Cuban Central Bank said. Deposits in freely convertible currencies such as the euro, Japanese yen, Canadian dollars and British pounds, among others, also will be accepted.
The suspension will affect Cuban Americans — who routinely support family members in Cuba with US dollars — and tourists visiting Cuba.
Tourists are being told to leave their US dollars at home.
A sizeable black market for US dollars has recently developed in Cuba. Additionally, there are “dollar shops” that accept US dollars. Whether the Cuban Central Bank’s decision will have a demonstrable impact on the black market remains to be seen, but logic suggests it will.
For many years now, as a result of US government restrictions, credit and debit cards from US banking and financial institutions — and even from non-US institutions — are unlikely to be accepted in Cuba, including at ATMs.
This forces tourists to bring significant amounts of cash with them — but, preferably not US dollars. In light of the Cuban Central Bank’s decision, the need for cash will become even more critical.
Amounts exceeding USD5000 must be declared.
Traveller's cheques in freely convertible currencies, including the ones mentioned above — unless issued by American Express — are accepted. However, the process of changing traveller’s cheques in Cuba can prove difficult, especially in remote locations and on weekends.