Cuba ‘Studying Cryptocurrency’ To Dodge US Sanctions, Says Gov’t (#GotBitcoin?)
Cuba is the latest country to consider using cryptocurrency to skirt U.S. sanctions, Reuters reported quoting a government source on July 3. Cuba ‘Studying Cryptocurrency’ To Dodge US Sanctions, Says Gov’t (#GotBitcoin?)
In a public address on local television, the country’s president, Migual Diaz-Canel, said the plan would raise capital for around one quarter of the population, helping to pay for reforms.
Cuba has felt a severe knock-on effect from the crisis in Venezuela, which was previously a major source of aid.
“We are studying the potential use of cryptocurrency… in our national and international commercial transactions, and we are working on that together with academics,” Reuters quoted economy minister Alejandro Gil Fernandez as saying.
As Cointelegraph reported, Venezuela itself rolled out its own state-run cryptocurrency, Petro, last year. Also designed to dodge sanctions, its use has so far remained limited due to a lack of international interest.
Other states are considering following suit, such as Iran, which is facing an ever more hostile U.S. reception.
It remains unclear whether Cuba is looking at creating its own cryptocurrency token or seeking to use an existing public one, such as bitcoin (BTC).
According to Gil Fernandez, the cryptocurrency-sponsored reforms are much needed, and would allow some form of decentralization in an economy still largely operated under soviet principles.
There are also plans to allow companies operating in Cuba’s Mariel Special Economic Zone to receive a portion of sales in hard currency.
Cubans Are Turning To Bitcoin To Access Global Economy
Bitcoin (BTC) trading is opening new avenues for citizens in communist-run Cuba, which has been financially isolated for years under a United States trade embargo.
A Sept. 12 report from U.S. News claims that, with the recent advent of mobile internet in the country, Cubans are increasingly using cryptocurrencies to make online purchases, as well as to invest and trade.
“Opening New Doors” In Retail
Without access to debit or credit cards for international use, cryptocurrency-enabled purchases are a welcome opportunity for consumers. In an interview with U.S. News, local resident Jason Sanchez said cryptocurrencies were “opening new doors” for Cubans.
The 35-year-old said that he was now able to purchase spare parts for his cellphone repair shop in Havana from an online Chinese store because of BTC.
Alex Sobrino — the founder of Telegram channel CubaCripto — estimated that roughly 1,000 Cubans were using cryptocurrencies, adding:
“We are using cryptocurrencies to top up our cellphones, to make purchases online, and there are even people reserving hotel rooms.”
With credit cards uncommon, many local crypto users reportedly need to ask relatives abroad to help them to enter the cryptocurrency markets or turn to social media channels such as CubaCripto.
Exchanges where cash is swapped for Bitcoin in person — using a mobile or laptop to carry out the transaction — are another option, the report notes.
A Solution To Financial Exclusion
About 1,300 users are currently using Fusyona, which claims to be Cuba’s first cryptocurrency exchange. The platform allows people abroad to send remittances to the country, or to invest in nine different cryptocurrencies via a larger exchange — with services charged at a fee of up to 10%. Fusyona founder Adrian C. Leon told U.S. News:
“For foreigners, cryptocurrencies is just another option. But for Cubans, it is a necessity and can be a solution to their exclusion from the global financial community.”
Sobrino noted that uncertainty and fear remain over how the government might react to the fledgling cryptocurrency trend. Fusyona is registered in Brazil but has started talks with central bank officials to investigate whether the platform could seal formal approval.
“We worry the government will restrict us, prohibit things, start to say this is illicit enrichment,” he said.
The central bank reportedly revealed earlier this week that it was exploring the benefits and risks of digital currencies.
In July, Cuba’s economy minister Alejandro Gil Fernandez said the government was consulting with academics to study the potential use of cryptocurrency for its national and international commercial transactions.
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