Cuba stopped lagging behind in the latest global trends a long time ago. If we are up to date in fashion, music or audiovisual productions, there is no reason to stay out of an expanding universe such as that of cryptocurrencies. So no one should be surprised that Bitcoin is a recurring topic of conversation.
For those like me who are still new to this world, a cryptocurrency is a virtual asset deployed as a digital representation of value that can be traded or transferred digitally and used for payments and investments. It can also be found under the names cryptoassets, virtual currencies or digital currencies.
We are not talking about one or two, but more than a hundred of them in circulation globally, differentiated by factors such as encryption, philosophy and the technology they use, Blockchain being the most widely employed. In a reduced ranking composed of those with the best prospects and popularity, the well-known Bitcoin (BTC) is positioned at the top with capitalization of more than one million U.S. dollars.
This position was obtained not only due to being the pioneer digital currency, after its launch in 2008, but also due to the increase in the penetration of potential markets such as those in Latin America, among which, of course, Cuba appears. This statement is supported by Google Trends, a platform that revealed in 2020 that one of the most recurrent search criteria in Cuba was “buy Bitcoin.”
What could be seen as a surprise became big news when, in May this year, Cuban President Miguel Díaz-Canel stated that the “convenience” of using cryptocurrencies for economic operations in the country was being analyzed, which would allow access to international financial markets and circumvent many of the sanctions imposed by the United States.
In addition, in August the Central Bank of Cuba announced its position regarding cryptocurrencies, authorizing their use “for reasons of socioeconomic interest” and presented the intention of granting licenses to service providers of these assets for operations related to financial, exchange, collection or payment activities in and from the national territory, all after receiving the authorization by the banking entity.
According to economist Marian Cabrera Soto, and due to the high level of technological security of cryptocurrencies, their use in Cuba can be very convenient since it would facilitate the use of “protected and robust payment mechanisms that allow for the payment of exports, imports and the channeling of trade and credit flows.” Likewise, “payment systems could be created between Cuban and foreign entities so that transfers can be made safely, quickly and cheaply, which would significantly reduce foreign exchange exposure,” she noted.
As they are extremely volatile assets, something to bear in mind is that, as they “they should not be used as a financial investment option, as it is difficult to compensate the risk of exposure with the volatility of such assets,” according to Pavel Vidal, PhD in Economics.
Perhaps one of the best-known voices on these issues is that of entrepreneur and youtuber Erich García, who on his channel Bachecubano addresses technological issues and is today one of the biggest promoters of the use of cryptocurrencies on the island. He says that “Cubans do not have a viable way to buy cryptocurrencies because they do not have the necessary financial instruments to do so” and that is why the best way to acquire them is person to person.
However, Cubans are using cryptoassets as a store of value, as a way to solve their emerging needs through purchases on international sites that accept them, or generating income through trading strategies.
In this regard, we already find Cuban enterprises that accept payments in cryptocurrencies with the consequent expansion of their customer base. For example, the Yarini Habana restaurant accepts bill payments through the Lightning Network platform, a Bitcoin off-chain micropayment network; and through a publication on its social media, Bar Pazillo announced that it was joining this cryptocurrency revolution by accepting them as a new means of payment in its premises.
The site coinmap.org offers a view where several points of the national geography appear, with a greater concentration in Havana, with businesses ready to operate with Bitcoin and other cryptoassets, grouped mainly in the sectors of accommodation and gastronomy.
I still think it is too early to say for sure whether the future of the Cuban economy will be digitally monetized. However, we cannot discard the discourse of cryptocurrency enthusiasts, which describes the digital assets market as an ocean of opportunities.
