Venezuela, which has been facing an economic crisis, recently stopped offering aid to Cuba. As a result, the small island state has been facing a food crisis. Due to the COVID19 lockdown, cash couriers, known as “mules” have been finding it hard to travel. As a result, it has led to everyday items becoming scarce.
Cubans Turn to Crypto
Amid an unprecedented crisis, Cubans are turning to cryptocurrencies such as Bitcoin. The country's first P2P exchange launched in April 2020 and it is called Qbita. While the global economy has been hit by a crisis, Cuba has been hit harder. The reason for this is that the country’s political and economic structure is highly centralized.
Food Shortages in Cuba
With the COVID19 outbreak, Venezuela, which is one of the biggest supporters of Cuba, is no longer able to do so. As a result, the government of Cuba is asking residents to grow food in every available space they can find. The lockdown by most nations has also made it hard for “mules” to deliver cash and food to Cubans. Besides the shortage of mules and the lack of aid from Venezuela, the nation also faces huge sanctions. The USA has imposed some of its toughest nations on Cuba. It has resulted in an economy that was already quite weak even before the latest crisis.
Cuban Crypto Exchange
Mario Mazzola, an Italian-Cuban, launched the Qbita crypto exchange in April 2020. The exchange is a P2P platform. Many Cubans are turning to crypto as a replacement for “Mules.” About 50,000 Cubans are "mules." They travel the world and bring back cash and various goods to Cuba. In the country, they account for about half of international cash remittances.
Bitcoin is proving to be a perfect replacement for Mules. Besides Qbita, Cubans are also using other crypto trading platforms. For instance, there are Cubans leveraging the LocalBitcoins platform. However, Mario Mazzola decided to launch the Qbita platform since Cubans using Paxful geo-blocks and LocalBitcoins platform requires strict KYC ( know your client ) protocols.
Cubans have been using crypto for a while now. For instance, a September 2019 report by Reuters revealed that Cubans were avoiding US sanctions by using Bitcoin. Besides that, there is a popular Telegram channel known as Cubacripto, where thousands of Cubans congregate to discuss and trade crypto.
The use of crypto for Cubans is still quite complex. The reason for this is that they face numerous economic sanctions by the US. As a result, they cannot simply sign up to one of the major exchanges and start trading since their nation is not supported.
However, Cubans have found various innovative solutions to skirt around the sanctions. It allows them to avoid government control and protect their wealth from hyperinflation. A similar process has been witnessed in Venezuela, where the use of crypto has become prevalent. In response to this, the country launched a national digital currency called the Petro. However, it has not received widespread adoption since most citizens simply do not trust it.
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