Cubans embrace cryptocurrencies amidst pandemic

Cuban residents are participating in the world of cryptocurrencies and electronic wallets as a practical solution to the financial sanctions imposed by the United States and the difficulties brought by the coronavirus pandemic.

Neither the poor internet connectivity on the island nor its technological backwardness has prevented operations like getting remittances, paying bills or accessing capital with digital currencies from becoming increasingly popular.

Due to the restrictions that Cubans have, they do not have the possibility of accessing traditional means of payments, such as credit cards.

The solution that a growing number of young people found is to trade cryptocurrencies, which in turn they save or resell for profit or use  for payments, exchanging them for cash that is converted into remittances and delivered to recipients through transfers from their mobile phones or money orders.

There are no figures on the amount that is moving in this money market throughout the island, but it seems to have increased since the administration of former President Donald Trump suspended the authorization of Western Union to work with Cuba at the end of 2020.

Added to that, the COVID-19 pandemic forced the cancelation of flights on which the "mules" brought cash.

The Miami-based consulting firm, The Havana Consulting Group, considered that last year some 2.3 billion dollars arrived in Cuba in remittances, 36% less than in 2019 due to the pandemic, through all possible channels; an important amount for a small country that reported income from tourism of about 3-billion dollars a year before the coronavirus paralyzed this industry.

But the cryptocurrency phenomenon that quietly grew is increasingly noticeable on the island's streets.

"The impact that the use of cryptocurrencies has had in Cuba from two years to now has been impressive. It has escalated in its use, in its interpretation, in what it is ," says Erich García, a 33-year-old programmer who gained influence as a' youtuber '.

The appeal is that money can be sent to family or friends "from anywhere in the world," without "any bank mediating," Garcia said. "It is a huge peer-to-peer network."

Among the most popular cryptocurrencies on the island are Bitcoin, Ethereum, Litecoin and USDT.

The rapid spread of the use of cryptocurrencies has attracted questions about the extent to which these currencies without a homeland and without the support of central banks or the production of goods and services in the country can be a long-term solution for the impoverished country or during an economic crisis.