Bitcoin Is A Necessity For Cubans
Bitcoin is seen as a store of value for investors in the west, but for the long-suffering Cubans Bitcoin is a necessity.
Cubans are now turning to Bitcoin as a way of receiving money sent from the US, after the two governments came to blows again, resulting in remittance companies having to halt business.
According to The Guardian, Cuba is closing 400 Western Union offices in the country. This move came after the US treasury banned US companies from doing business with Fincimex, a Cuban military-controlled firm that processes remittances for Western Union.
Western Union responded by telling all of their clients they have a ‘limited time to send money to their loved ones from the United States to Cuba,’ as their offices will be closing on 23 November.
The spat is expected to cut off nearly all remittance lines and will hinder all international business and personal cashflow in and out of Cuba.
It’s a never-ending penalty for the long-suffering Cubans. They have basically been ostracised from the global markets for over 50 years, and the country has fallen into deep poverty.
But now after all this time, they are starting to discover a lifeline.
Cubans Are Discovering on The Bitcoin Lifeline
Bitcoin doesn’t have a marketing team, but if anyone were to apply, the US government would be the ideal candidate.
Sanctioning countries is playing right into the Bitcoin playbook, and in Cuba’s case Bitcoin is a necessary tool for remitting value from families and friends in the US.
Cuba has spent 58 years under the heavy arm of US imposed sanctions, but overseas Cubans constantly look for ways to send money home. And with most financial institutions banned from doing so, Cubans now have no other choice but to use Bitcoin.
Cubans, who are becoming increasingly desperate, are discovering like their Argentinian and Venezuelan counterparts that they finally have a way around the sanctions.
Most of the Cuban population is dependent on receiving finances from friends and relatives working abroad. However, most of them are illiterate when it comes to Bitcoin and hardly any have access to the Internet.
This has led to the rise of a BitRemesas, a Cuban platform which has taken on the role of a remittance company, with a twist.
Instead of fulfilling the remittance role, BitRemesas auctions the BTC remittance payments off, and the winning bidder converts the Bitcoin into cash and delivers it to the receiving family.
The middleman often have to travel far to deliver the cash, and take up to 25% commission for their efforts, but it’s the only way Cubans can get around the sanctions.
It’s a clunky and awkward system, but it’s created a market and at least the Cuban families can get around the sanctions and have access to a global financial tool.
It’s a similar pattern across Latin American, as the term ‘buy bitcoin’ is now trending in the Spanish-speaking Americas.
In Argentina they have turned to Bitcoin because their own government has imposed a $200 monthly limit on the amount of USD they can exchange. The limit was imposed by the government because the peso to USD had fallen from a 1:1 parity to 72:1 in 20 years.
The people of Argentina have to look elsewhere to store value because they’re losing it a rapid rate keeping it in peso.
Whereas, the necessity of Bitcoin for Venezuelans is actually having a currency merchants will accept. The bolivar is so worthless merchants in the country won’t accept it.
Caracas has tried to promote the adoption of its own cryptocurrency, Petro, but the people there simply don’t trust it and instead have turned to Bitcoin and other cryptocurrencies.
Bitcoin Is a Necessity In Developing Countries
Cuba lacks the technological infrastructure and IT literacy that Venezuela and Argentina can boast, so getting hold of Bitcoin and other financial assets is awkward, but not impossible.
With so many of the Cuban population dependant on remittances being sent from family working abroad, Bitcoin adoption in Cuba is starting to take off.
This is evidenced by the rise of BitRemesas, which handles the remittance and actually sells it to the highest bidder, who then sells the Bitcoin and delivers the cash to the receiving family.
It’s a classic case of humans having no other option so their ingenuity bears fruition. And Bitcoin is a necessity for the people of Cuba.
Governments around the world will try and control the finance that goes in and out of its shores, but as we’re seeing across Latin America, when something is a necessity, people find a way.