By Alicia Maher
News coming out of Cuba has stated that the government is looking to Bitcoin and other cryptocurrency transactions as a way to boost the socioeconomic wellness of the country. According to a local newspaper, the government will soon recognise and regulate cryptocurrency transactions. Cuba has been the victim of an ongoing blockade and trade embargo by the United States Government for over half a century. After so long, under the economic thumb of the US, it seems the Cuban government now sees cryptocurrency transactions as a viable escape route to boost its economy and facilitate transactions that the US cannot obstruct.
Can Bitcoin Save Cuba’s Flagging Economy?
The economic blockade against Cuba is the longest trade embargo in history. The United States has run this blockade for over half a century, initially stopping all trade between their respective governments and also barring its citizens from trading with the country but later allowing for the exchange of food and medical care. A 1992 report stated that the embargo had led to an estimated $28.6 billion in losses for Cuba. Separate from its own trades, the US also dissuades its allies and prohibits foreign subsidiaries of US companies from trading with the country. This, combined with the serially problematic governance of Cuba has led to a significant toll on the country’s economy.
Cuba’s current president, however, seems to be on a different path than his predecessors. The willingness of the country to integrate cryptocurrency into its financial systems shows an inclination that could prove positive in the long run. Adoption of crypto could provide a way for Cuban and American citizens to bypass the trade embargo due to the immutability and anonymity that crypto transactions provide. It presents a path that, while largely unexplored, could finally be the way to save Cuba from its current economic crisis.
The development is still new with more plans than concrete action currently but the future of crypto in the country could be very bright if it is integrated properly into the economy. The nature of cryptocurrency would be a boost to transactions for local vendors. Its anonymity would allow many transactions to bypass the current US sanctions and might open a new trading route for Cubans.
Countries Continue To Embrace Crypto
As predicted by many analysts, El Salvador’s adoption of Bitcoin as a legal tender has emboldened other governments to take similar steps. In the wake of its announcements, many countries seem to be increasingly warming up to the adoption of cryptocurrency in various capacities. While other countries have not gone as far as adopting it as a legal tender the same way El Salvador has, they have at least started the conversation on its regulation which indicates increasing importance being given to cryptocurrencies.
Argentinian President, Alberto Fernandez was also quoted this month saying he would be open to the eventual adoption of Bitcoin as legal tender. While some have condemned his stance since then, others have also applauded it and the continuing conversations being had around it will serve to promote the use and introduction of it in the future.