Eyonys González activated the mobile data of her cell phone, received a notification that indicated the arrival of an amount in cryptocurrencies and with a few clicks she transferred 300 Cuban pesos to the account of a compatriot, the equivalent of about 12 dollars.
Without leaving her house in Havana or touching a single bill, González acts as an intermediary who exchanges digital money for Cuban dollars or pesos, both of which are locally circulated. That is, if a family member or friend opens an electronic wallet to send cryptocurrencies, he receives them and for a commission he delivers currency that an island resident can use to buy products or pay for services.
This 33-year-old software developer is part of a small but growing community – especially young people – who use these virtual currencies to convert them into remittances in a context aggravated by the United States sanctions on the Caribbean nation and whose effect is worsened with the new coronavirus. On the other hand, although they are not regulated by any government or bank and some experts consider it a risk, some on the island acquire cryptocurrencies to protect their savings from the devaluation of the Cuban peso.
Eyonys González poses for a photo with her bitcoin wallet, at her home in Havana, Cuba, on Monday, March 29, 2021. Without leaving their homes or touching a bill, young Cuban professionals and developers are becoming more and more involved in the world of cryptocurrencies. (Ramon Espinosa / AP)
“I receive those remittances, I make the payment and use those cryptocurrencies,” explained González, a member of the online platform BitRemesas through which the operation was carried out, smiling.
Emerged in 2009, cryptocurrencies are virtual money – it does not exist in physical form – that are not backed by gold as in the past or in the wealth of a country, as in the case of national currencies that we know today.
There are no figures on the amount that is being moved in Cuba, but according to experts consulted by AP, its use has increased since the administration of former President Donald Trump began a harsher persecution of banks and investors who dared to work with the island and At the end of 2020, it suspended Western Union’s authorization to work with Cuba. At the same time, the COVID-19 pandemic forced the cancellation of flights in which the “mules” – people who are dedicated to trafficking – brought physical tickets.
The BitRemesas platform started on October 1, 2020 and already has more than 5,000 members, Erich García, a 33-year-old programmer who developed this mechanism together with a team of colleagues, explained to the AP. “The impact that the use of cryptocurrencies has had in Cuba from two years to now has been impressive. It has escalated in its use, in its interpretation, in what it is ”, explained García, an enthusiast of the possibilities offered by this digital money.
The platform was developed after many people began to trade cryptocurrencies in WhatsApp or Telegram groups and a community of interested parties became visible on the island, which has a large number of programmers, cybernetics and engineers among its professionals.
The appeal is that money can be sent to family or friends “from anywhere in the world,” without “any bank mediating,” Garcia said. “It is a huge ‘peer to peer’ (person to person) network.”
It works like this: a person abroad opens an electronic wallet – there are many pages for this on the internet – and buys cryptocurrencies – usually through international cards such as Visa and Mastercard – which they then send through BitRemesas along with the name and details of your beneficiary in Cuba.
Immediately, the platform offers this exchange to some of its members associated with the page on the island – such as González – and he converts the cryptocurrencies into local currency – dollars if it is a bank transfer or Cuban pesos if the money is delivered in physical – to be paid to whom it may concern.
There are no limits on the amounts and among the most popular cryptocurrencies on the island are Bitcoin, Ethereum, Litecoin and USDT, which González used for his operation.
The value of the change is determined by the supply and demand in the community. To date, for every 100 dollars in cryptocurrencies that someone from abroad sends to Cuba, the final recipient receives about 86 if the intermediary carries out the transaction through a bank. On the island, Cubans cannot withdraw dollars from their bank accounts, but they can buy dollars in that currency in state stores with a magnetic card provided for this purpose.
On the other hand, if the receiver on the island requires the money in cash, the intermediary can provide it by hand or through a money order and the exchange for $ 100 in cryptocurrencies would be equivalent to about 3,500 Cuban pesos. To do so, according to the state quote, it would be about 2,400 Cuban pesos and according to the black market, 4,700 pesos. Therefore, the broker and the platform get a difference that becomes their commission.
Cuba is not alone on the continent: reports to the AP in Argentina, Chile and Central America indicated that the use of cryptocurrencies is increasingly popular, even among indigenous communities in El Salvador with strong immigration and potential generators of remittances from the United States .
The head of Economy, Alejandro Gil, said in 2019 that Cuba was studying the application of cryptocurrencies “in national and international commercial relations”, given the offensive of sanctions implemented by Trump seeking to suffocate the island’s economy and pressing a change in its model. political.
So far there have been no government announcements about it and its use is controversial.
“Given the political vision behind crypto assets (cryptocurrencies) that seek the creation of private money and the denationalization of the currency, it is evident that they constitute a challenge for the Cuban government that has a statist vision, but also for the North American government that it has a sanctions stance towards Cuba, ”economist and expert on Cuban issues Arturo Lopez Levy, a professor at Holy Names University in California, told the AP.
López-Levy considered that for now there are no “private actors” on the island with the strength to generate a great business with this digital money, “but that does not mean that there are significant profit margins to be obtained in a Cuban context,” he considered Lopez-Levy.
From a completely skeptical position, Mauricio de Miranda Parrondo, economist and academic from the Javeriana University, Cali in Colombia, considered that Cuba should focus on the production of goods and services that it lacks instead of trying to solve economic problems with digital currencies. .
In general, young digital money operators on the island are aware of the dangers that the phenomenon faces worldwide – from the scams that also began to circulate on the island using cryptocurrencies, to the regulatory rumors that come from the States themselves. United – but they warn of the relief it brought to many families and the increase in its use.