In a groundbreaking move, the Cuban government declared on Thursday the approval of private banking on the island, marking a first since the nationalization of the financial system post-1959. This announcement came during an extraordinary session of the National Assembly, where Prime Minister Manuel Marrero Cruz laid out a comprehensive package of 176 economic and social reform proposals to deputies gathered at Havana's Palacio de Convenciones.
Televised by Canal Caribe, the session saw the presence of Miguel Díaz-Canel, acting in his capacity as the First Secretary of the Communist Party and President of the Republic. Also participating via videoconference was Raúl Castro, referred to as the "leader of the Revolution."
Under the new measures, private banks will operate under the oversight of the Central Bank of Cuba, enjoying the same regulatory conditions as state banks. This marks a historic shift in a financial system that has been under total state control for over six decades.
The financial reforms include the establishment of private non-banking financial institutions—domestic or foreign—to provide microloans, the ability to open foreign currency accounts without prior administrative approval, and the creation of a regulatory framework for virtual assets and financial technologies.
The government further announced the formalization of remittances through a private channel known as the "last-mile payment agent," the removal of limits on bank transfers and withdrawals for individuals and businesses, and the granting of a non-banking financial institution license to Transfermóvil.
Díaz-Canel defended the new policies with a rationale that starkly contrasts with decades of official rhetoric: "Cuba needs more agile, digital, people-friendly banks that are useful for those who produce, export, import, invest, or start businesses."
The president also elaborated that companies involved in importing, exporting, or providing global services will be allowed to have accounts abroad, a move unprecedented in Cuba's financial framework since 1959.
These reforms emerge amid Cuba's worst economic crisis since the Special Period of the 1990s. By May 2026, over half of Havana's ATMs were out of service, with Cubans enduring queues of four to six hours at bank branches for basic transactions like pension withdrawals.
The latest blow to Cuba's financial system came on June 3, when Visa and Mastercard halted operations on the island through FINCIMEX. This was a result of Executive Order No. 14404 signed by Donald Trump on May 1, 2026, which imposed secondary sanctions on foreign financial institutions linked to GAESA and FINCIMEX.
The Economic Commission for Latin America and the Caribbean (ECLAC) predicts a 6.5% drop in Cuba's GDP for 2026, with a cumulative contraction of 10.3% over 2025-2026.
The package of 176 proposals, organized into 23 main pillars with 69 additional recommendations from the Political Bureau, received approval the day before at the Extraordinary Plenary Session of the PCC Central Committee. Raúl Castro endorsed the measures by signing the document and cautioned in a message read during the plenary that "as important, if not more so, than the approval of these transformations is their proper and timely implementation," indicating skepticism about the actual execution of reforms even within the regime itself.
Key Questions about Cuba's Private Banking Reforms
What prompted Cuba to authorize private banking now?
The authorization of private banking is part of a broader package of economic and social reforms aimed at addressing the severe economic challenges Cuba faces. The move toward private banking is seen as a necessary step to modernize the financial system and stimulate economic activity.
How will private banks operate in Cuba?
Private banks in Cuba will operate under the supervision of the Central Bank of Cuba and will be subject to the same regulatory conditions as state banks. This is intended to ensure a level playing field within the financial sector.
What financial reforms accompany the introduction of private banking?
The reforms include the establishment of private non-banking financial institutions for microloans, opening foreign currency accounts without prior approval, a regulatory framework for virtual assets, and the formalization of remittances through private channels.