Cubans use Bitcoin to circumvent embargo sanctions
A complex and extensive network of crypto enthusiasts facilitate remittances from the US to Cuba
It appears that Cubans have found modern solutions in their attempts to circumvent the embargo sanctions that were imposed by the US Government back in 1962. A report, released on October 26 by Cuba’s AFP news agency, revealed that remittances set from the US to Cuba often pass through a complex underground network of crypto enthusiasts before it is converted into Cuban pesos.
A 33 year old programmer and local Youtuber, Erich Garcia, told AFP that people who are planning to send remittances to the country need to buy Bitcoin and send it through a Cuban crypto exchange called BitRemesas.
“We do not have access to payment platforms or with Stripe, or with Visa, Mastercard, Paypal, Union Pay, we do not have access to anything, to any of those resources. What technology has allowed us to dream, see other scenarios? The blockchain, bitcoin.” Garcia explained.
The crypto users who are on the island will then bid to offer recipients the best price for their coins on WhatsApp or Telegram. A middleman from the network will receive, on average, a 25% commission for their part in facilitating the risky and legally questionable operation.
Once a deal is reached between the two parties, both sides will set a time and date to complete the trade. Entities that are trading Cuban pesos for Bitcoin will often go through long and intense bike journeys through the Caribbean heat just to finalise these transactions.
While the group appears to be an informal, self organised setup, thousands also appear to be using their services.
While cryptocurrency is a thriving industry in the Caribbean island, it appears that the Cubans who use Bitcoin on the island are forced to do so in secret. This is due to the strong restrictions by the government.
“Thousands of Cubans buy cards at Bitrefill to consume those digital services by paying with cryptocurrencies. There is no other way,” Cruz stated.
While it is not possible to say how many people in Cuba have already started using Bitcoin, a Cuban expat based in Brazil named Claudia Rodriguez said that her exchange served almost 7,000 Cuban user accounts by November 2019. However, as of August 2020, she had to stop the exchange’s operations for legal reasons. One such reason was a lack of regulatory clarity from the Central Bank of Cuba.
“Due to the economic crisis caused by the pandemic and the new restrictions in Cuba, cryptocurrencies can be an efficient solution. It is a shame that we cannot continue to support the community at this time,” Rodriguez lamented.