The Republic of Cuba, an island state in the Caribbean, in the grip of insurmountable economic difficulties, seems to want to integrate the crypto option into its monetary future. The government has just announced that it will allow and regulate payments in bitcoin and “some” altcoins.
An emergency situation
Cuba has experienced since the 60s a difficult economic situation linked to internal structural blockades and the American embargo, strengthened under the Trump administration and not yet relaxed by Biden. The Covid-19 pandemic completed the disaster. Indeed, the health measures taken by the Cuban authorities (border closures, import restrictions, energy restrictions…) have paralyzed an already bloodless economy. The crisis has further dried up Cuba’s main foreign exchange revenues : tourism sector at a standstill and expected fall in financial transfers from the Cuban diaspora (-30% according to the Havana Consulting Group in 2020).
Faced with a deteriorating situation resulting in a liquidity crisis and a growing shortage of basic necessities, the population has not only expressed its dismay by demonstrating-great first repressed-at the cry of “We are hungry! » and “Down with the dictatorship !», but also turning more and more to cryptocurrencies. Bitcoin of course, but also USDT (Tether), which advantageously replaces the US dollar banned from the island, for remittances from the United States.
It is therefore in the name of a certain pragmatism that the authorities in place are initiating a change of course.
In Cuba, the crypto option on the agenda
Resolution 215 was published in the local Official Gazette. It states that Cubans will be able to use cryptocurrencies to make payments from September 15. It also indicates that Banco Central de Cuba is working on an authorization license for companies offering the purchase and storage of digital assets. A proper regulation is also in preparation but without more precision.
This initiative est taken for ” reasons of socio-economic interest “. The official publication also recalls that cryptos are risky and that they operate on the margins of the financial system.
Fact, if the government of Miguel Díaz-Canel is considering the crypto option, it is not in the manner of President Nayib Bukele in El Salvador who will devote in a little more than a week bitcoin as legal tender.
The Cuban approach is a priori more conservative and less daring. At the moment it is only a legal recognition of “certain” cryptocurrencies as a means of payment. And not to recognize bitcoin as official currency. Let’s wait, however, to see what will come of the regulatory project in preparation.
After Argentina, Paraguay, Uruguay, Panama, this region of the world, plagued by rampant inflation, is the first to seriously consider the adoption of cryptos as a viable solution, carried often by a population out of breath, but no resources, that shows the way to its leaders.
