Over 100,000 Cubans are reportedly using Bitcoin and cryptocurrencies to bypass punitive sanctions, according to news feeds on May 3, 2022.
Internet Penetration Fuels Crypto Adoption
The explosion in crypto adoption comes roughly three years after it was connected to the internet, linking the once isolated and repressed country to the rest of the world.
Because of the trade embargo placed by the U.S., Cuba cannot use digital payment processing solutions such as PayPal and other alternatives.
Global banks found offering services to Cubans or its affiliates have been heavily fined for violating imposed sanctions in recent years. Subsequently, its citizens were isolated until after it was plugged into the internet, liberalizing citizens.
Cryptocurrencies for Remittance
Unlike fiat currencies and traditional financial structures, cryptocurrencies adopt a unique architecture. Its philosophy is tied to complete decentralization, economic liberty, and diffusion of financial control to the true owners of value.
Therefore, instead of being reliant on a centralized minter, crypto advances the idea of a collaborative network and cryptography. Funds can be transferred trustlessly between users, cheaply and conveniently, at any time of the day.
Accordingly, crypto solutions are proving ideal for many Cubans. Specifically, leading liquid cryptocurrencies are proving a way out of sanctions’ limitations. Unlike traditional setups, any citizen in a jurisdiction whose leaders have embraced crypto solutions can transact using the network.
Cuba’s Central Bank to Approve Crypto Service Providers
Recent reports also indicate that Cuba had started approving cryptocurrency service providers pending final licensing from the central bank.
As Cuba finds reprieve, their creation of a warm crypto regulatory framework would directly bring benefits. Specifically, the central bank will consider legal, social-economic, and individual project characteristics before issuing a license valid for one year.
Commenting on this development, Pavel Vidal, an economist, said,
If the central bank is creating a cryptocurrency-friendly legal framework, it is because they have already decided that it can bring benefits to the country. This can reduce the cost of these international transactions and generate an alternative to operations in dollars, less sensitive to the sanctions scheme.
Increasingly, more countries are accepting Bitcoin and cryptocurrencies. As BlockMagnates earlier reported, Fort Worth became the first city government in the U.S. to officially mine cryptocurrencies.
- Crypto News BlockMagnates: Photo by AbsolutVision on Unsplash