Cryptocurrency as an Economic Enabler in Sanction-Struck Cuba
Cuba has long been subjected to American sanctions for long-standing problems with the communist government. According to sources at Reuters, Cubans are using cryptocurrencies as a means of overcoming the barrier of economic sanctions and participating in international trade, September 13, 2019.
Ascending Above Authority
Bitcoin today is largely covered by a narrative that considers it a store of value over an efficient medium of exchange. Practical evidence from across the world shows that cryptocurrency as a method of enabling commerce is a far more important use-case.
In Cuba, residents are deprived of many benefits that other countrymen are granted. They cannot obtain debit/credit cards for international use and have effectively been cut off from global financial markets.
The advent of decentralized currency has helped Cubans restore their liberty by rising above sanctions.
Reuters outlines the story of an entrepreneur, Jason Sanchez, who used cryptocurrency to buy spare parts for his mobile phone repair business. Sanchez says that Bitcoin has opened new doors for Cubans, and it is allowing them to source high-quality input material from China.
There are Telegram channels in the country that help people exchange digital currencies. Cryptocurrency is used to top up phones, book services in other countries, and take part in the general space of e-commerce.
But trading cryptocurrency in Cuba is still a touchy topic from the regulators’ lens. Because of this, there were no formal exchanges, and most transactions happen face to face or over a phone call with trusted parties.
Early Bitcoin idealists would consider this the optimal way to use decentralized currency.
Cuban Government and Exchanges
Recently, Cuba saw the inception of Funsyona: a cryptocurrency exchange. It is a facilitator of exchange rather than a proper exchange.
It uses the foreign currency of those remitting money to Cuba to buy cryptocurrencies on a proper exchange. Then, Funsyona uses Cuban pesos from those purchasing cryptocurrency to beneficiary of the remittance and sends the necessary amount of crypto to the purchaser.
The Cuban government was considering a national cryptocurrency to skirt pass American sanctions, and John McAfee offered to help them design it. There has been no update on that front since the news first broke.