Unveiling Cuba’s Bitcoin Transformation: A Close-up Insight
Cuba’s Bitcoin Transformation
Forte, co-founder of the locally established Bitcoin organisation, Cuba Bitcoin, emphasises the pragmatic utility of Bitcoin for Cubans, stating, “Satoshi didn’t envision Bitcoin for Cubans, but it has proved invaluable for us.”
Economic Struggles Fueling Bitcoin Adoption
The Cuban peso’s staggering devaluation, aligning it closely with the runaway inflation seen in countries like Zimbabwe and Venezuela, has forced locals to grapple with increasing worthlessness of their money. Carrying copious amounts of cash has become a common sight among both the affluent and those struggling financially.
The Cuban Economic Landscape
Intriguingly, even if someone had purchased Bitcoin at its peak during the 2021 bull run at $69,000, the currency’s depreciation against the Cuban peso paints a different picture. While Bitcoin plunged 80% to its bear market low and then fully recovered, the Cuban peso plummeted by a substantial 90%.
Cuba’s Financial Challenges
This stark realisation, that exchanging local currency for Bitcoin at its peak would still retain more value, has been an eye-opener amid the making of crypto trend tales investigative documentary, ‘The Truth Behind Cuba’s Bitcoin Revolution.’
Impact of Hyperinflation on Citizens
The article ‘Inside Cuba’s Bitcoin Revolution’ by Human Rights Foundation’s Alex Glad stein shed light on how Cubans were leveraging Bitcoin’s stateless nature and low transaction fees to safeguard their savings from financial oppression. Intrigued, I embarked on a personal journey to witness this phenomenon firsthand.
Bitcoin’s Role in Cuba
Arriving in Havana after the extravagant Bitcoin Miami conference, the contrast between Cuba’s socialist setting and the capitalist fervor in the United States was striking. From manual door operations to archaic check-in systems at the airport, Cuba indeed felt like a place frozen in time.
Bitcoin’s Appeal in a Closed Economy
The country’s economic isolation, compounded by a trade embargo lasting over six decades, has isolated Cuba from global markets, financial institutions, and international trade, leaving its industries and economy trailing far behind the rest of the world.
Grassroots Bitcoin Adoption in Havana
Despite such adversity, a Bitcoin awakening is underway among Cubans. Catrya, a pivotal figure in Cointelegraph’s documentary and a Cuba Bitcoin co-founder, estimates around 5,000 Bitcoin enthusiasts in Cuba, a number that surges when including crypto enthusiasts at large.
Challenges of Access and Connectivity
However, accessing cryptocurrencies poses a significant hurdle for Cubans. Nationality restrictions bar them from signing up on major platforms like Binance or Coinbase. Cuban Americans face government-imposed limitations on accessing American websites while on the island. Thus, Cubans resort to peer-to-peer Bitcoin transactions via Telegram, WhatsApp groups, and in-person meetings.
Limited Internet Access and Its Implications
What’s astonishing is the meager amounts Cubans set aside in Bitcoin, often as little as 1,000 satoshis (less than $1 a week), which holds substantial value for someone earning a meager $40 monthly. The uncertain future of the Cuban peso contrasts with the resilience of Bitcoin, a factor driving many towards its adoption.
Overcoming Barriers to Bitcoin Adoption
While the peer-to-peer process lacks user-friendliness, the necessity for privacy due to the inability to undergo Know Your Customer (KYC) checks has led to a silver lining, according to Catrya. Embracing a non-custodial approach to Bitcoin storage, avoiding platforms like FTX or BlockFi, adds a layer of security despite the process being more time-consuming.
Cuban Perspectives on Bitcoin
Connectivity to the online world has been a slow journey for Cuba. Access to 3G and intermittent 4G remains a privilege, with tech-savvy individuals resorting to VPNs to navigate online restrictions. Despite improvements in internet access, censorship looms large, with state-run media predominating, fostering a deep-rooted trust in the government.
Bitcoin as a Tool for Financial Independence
The challenge of educating Cubans about Bitcoin’s potential is a task shouldered by devoted Bitcoin advocates like Bitalion, a government telecom employee. He champions the idea of carrying Bitcoin on a mobile wallet as a valuable asset while traveling abroad, highlighting its borderless nature.
Cuban Entrepreneurs Embrace Bitcoin Adoption
The embrace of Bitcoin by local businesses symbolizes an economic shift. Cruz from QvaPay outlines how Bitcoin aids Cuban entrepreneurs in accessing foreign goods, providing a shield against government surveillance. The allure of financial autonomy and liberation from government control resonates deeply with citizens disillusioned by unmet promises.
Conclusion
Bitcoin’s adoption in Cuba extends beyond financial prudence. Its role in safeguarding wealth, enabling safe travel, and even aiding victims of theft showcases its multifaceted impact on everyday life. The underlying promise of Bitcoin for Cubans lies in its potential to secure their financial future amidst economic turmoil and to open doors to embargoed markets and global finance.
