If there is one thing that the global crypto community and Cubans have in common, it’s their revolutionary spirit. A Caribbean Island with over 11 million people, Cuba is slowly discovering the power of digital gold. Despite slow and expensive internet, Cubans are learning ways to send, spend and leverage Bitcoin. This is what true global independence looks like.
Sadly, sanctions make it hard to access basic resources such as food, medicine and toiletries in the country. The COVID pandemic has exacerbated the economic situation of most Cubans, especially those working in the tourism sector.
According to the Cuban Observatory of Human Rights, poverty in Cuba doubled in the first quarter of 2020. Currently, 21% of Cubans live on $20 each month and 64% of Cubans live with $1 a day. These and other political and economic circumstances of the country have forced Cubans to start using cryptocurrencies, capitalizing on its borderless use case.
The Advent of a New Cuban Dollar
In 1994, Cuba introduced the CUC (Cuban convertible dollar) which gained strength on the island after the government banned the U.S. dollar on the island in 2004. Cuba soon adopted a two currency system consisting of the Cuban peso (CUC) and the Cuban convertible dollar (CUP).
Last year, Cuban authorities announced a currency reform to mitigate the economic crisis during the pandemic, eliminating the CUC and leaving the Cuban peso as the only local currency. Without tourism which brought dollars to the island, Cuba was in deep need of fiat currencies.
To boost the country’s economy, the government opened MLC stores. MLC, also known as Moneda Libremente convertible, is a debit card that can be loaded with fiat currencies such as the dollar and euro. While MLC stores are fully stocked with essential items, most CUP stores are empty.
The rooted injustice of the MLC system is that the majority of Cubans don’t get paid in dollars, and many times the only way to acquire hard currencies are through remittances. People who can not access remittances are left with two options; buy dollars for a higher price in the market due to scarcity or not buy anything at all.
The current economic state of the island has pushed people to think creatively and use cryptocurrencies as a form of survival. By way of example, a famous YouTuber named “Bache Cubano” explains how to use bitcoin to fund MLC cards, in a fast, reliable and easy process, alleviating such an important need in Cuban society.
Bache is one of the biggest YouTube influencers in Cuba. In the past he has stated how he has been able to monetize his brand using cryptocurrencies, empowering his viewers to do the same. For him, cryptocurrency goes beyond remittances, as he also sees it as a way to fund Cuban enterprise and provide more opportunities for people in the island who have been left out of the digital economy.
Crypto Necessity Versus A Choice
The current embargo does not allow U.S companies to be involved in Cuba, and with Western Union banning remittances to Cuba, people are more desperate than ever before. Currently, the conversation about bitcoin and crypto is still very new, yet more and more Cubans are using bitcoin for both savings, income, and even trading arbitrage.
With companies like Paxful and Local Bitcoins banned in the country, Cubans are coming up with all sorts of creative ways to access cryptocurrencies. They have created Telegram group chats and are using back-end companies like Bitremesas to send remittances, pay for cell phone and internet bills with crypto currencies.
Recently, an exchange called Qbita opened its door to Cuba. In their mission statement they mention how the company was inspired by “ the heroic resistance of the Cuban people, who face the financial censorship of the powerful northern enemy”.
Cuban Adoption Is Inevitable
Bitcoin is gaining credibility in the Cuban community, especially after the recent news about Miami, the biggest hub of Cuban migration, emerging as an epicenter of Bitcoin activity in the U.S. Miami has approximately 700,000 Cuban-born residents, who are slowly experiencing the benefits of Florida’s crypto economy.
With Miami supporting the growth of crypto, it is inevitable that we’ll start seeing more Cubans engage in crypto remittances and businesses. Crypto is truly a powerful weapon against sanctions imposed by the United States. It will be very interesting to see how crypto will become part of Cuban history.