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Over 100,000 Cubans Are Now Using Cryptocurrency (Report)

Many Cubans now use cryptocurrencies as an alternative medium of exchange as the country’s traditional payment channels are constrained by US sanctions. Over 100,000 Cubans are reportedly using digital assets, thanks largely to the mobile internet that reached the country just three years ago.

Cuba’s crypto economy

NBC News recently interviewed Nelson Rodriguez – a Cuban cafe owner who is now both Bitcoin as well as accepted Ethereum for payments. He said he believes in crypto’s “philosophy” — often associated with free market ideals, property rights, no borders, and resistance to censorship.

In contrast, Cuba is ruled by a communist party and citizens cannot use internationally accepted debit and credit cards due to American sanctions. Paypal, Revolut and cell are all banned in the region.

But no cryptocurrency: the Cuban Central Bank announced that it would start doing so issue licenses this month to virtual asset service providers. Eight months earlier, the Cuban President was reportedly investigate the legalization of cryptocurrencies for payments.

As Rodriguez explained, digital currencies mean that payment service providers are no longer necessary for commerce and their prohibitions remain negligible.

The technology is game-changing for the region, as international banks trading with it can be fined hundreds of millions of dollars. Therefore, even if the Cuban government has the money required for a trade, executing payments is still an immense challenge.

dr Emily Morris, an economist from University College London, said it is hardly surprising that the Cuban population is turning to crypto. “If you can process transactions directly between two parties that don’t have to go through a bank, then that would be of interest,” she said.

NBC also interviewed Ernesto Cisneros, a Cuban musician who attended NFTs turned after his business collapsed due to the restrictions imposed by the Covid-19 pandemic. He now stores his music, videos and photos on the chain and sells them online for money.

A sanctions killer?

Cryptocurrency’s role in sanctions evasion has been under scrutiny by governments since the US imposed sanctions on Russia in February. Although small Cuban coffee shops may be able to circumvent these limitations using crypto, chainalysis Expectations that this is impractical for alternative national governments.

Binance CEO Changpeng Zhao too specified that using crypto for sanctions is a myth. “Crypto is too traceable,” he said. “Governments around the world are increasingly getting very good at tracking crypto transactions.”

Source: Crypto News Deutsch

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