Biden Moves to Open U.S. Banks to Cuba’s Private Sector

The Biden administration, in a major move to support Cuba’s expanding private sector, announced on Tuesday new regulations allowing Cuban entrepreneurs on the island to open bank accounts in the United States for the first time and to make remote online transactions.

The loosening of banking rules could help entrepreneurs to grow and encourage more Cubans to start small businesses, Biden administration officials said, and is meant to help support Cubans facing hardship amid the country’s economic crisis.

Until now, as part of the strict economic embargo the United States has long maintained against Cuba, private owners could not access U.S. banks and have largely had to rely on cash remittances from relatives in the United States to finance their businesses.

The U.S. Treasury Department said the new rules applied only to “independent private sector entrepreneurs” who had no connection to the Cuban Communist Party, the military, members of the Cuban National Assembly, or anyone on a list of officials sanctioned by the United States.

The Cuban government did not immediately respond to a request for comment.

In a major reversal that came decades after Cuba’s revolutionary leaders nationalized the economy and outlawed private companies in the 1960s, the Cuban government in 2021 authorized the establishment of small- and medium-size private businesses.

Since then, those enterprises have significantly grown, importing roughly the same amount of goods last year as the Cuban government, according to Cuban officials.

Cuban economists estimate that the private sector now accounts for nearly a third of all employment on the communist-run island, with more than 11,000 licenses issued for private companies. Each private business is allowed to hire a maximum of 100 employees.