How Do Cubans Use Cryptocurrencies?

He contacts me through WhatsApp, he is not one of those currency sellers that station themselves outside the Exchange Houses (CADECA) and offer their services to passersby. His name is José, and we went to high school together. He talks about cryptocurrencies—Bitcoin, Ethereum, Litecoin, etc—terms that are not completely unknown to me, but that between the daily struggle and the heat that threatens to cook us on this Island, I’ve been able to study little more about.

I ask if he will read me the sacred gospel of the “investors” that currently swarm the network, and he says he will not because he does not believe in Ponzi schemes or in the 200% miracle, a kind of Loaves and Fishes that “Trusters” use to recruit new members to their networks.

Like my friend, there are already thousands of Cubans who have entered the world of cryptocurrencies. A simple Google search will show you more than 800,000 results between trade offers and information about communities of Cubans that have been created around this universe.

Cryptocurrencies vs the Economic Embargo and Sanctions

Using cryptocurrencies, or crypto assets [or tokens] as they’re also called, is one of the ways that Cubans most frequently access the global market, especially that technological sector so high demand and isolated from Cuba. Thanks to the versatility of electronic money, the citizens of this country have been able to circumvent the limitations of the US economic embargo, which prevents them from obtaining various services and products. To do so, it is necessary to have a virtual crypto wallet with a balance, as well as use VPNs or Proxies that grant the user online access from other locations in order to purchase from stores that are not available due to restrictions.

Among the most common uses of crypto assets on the Island is the recharging of cell phones and the sending of remittances on platforms such as TropiPay and Bitrefill. Other platforms, born of Cuban entrepreneurs, include Nercado, a virtual store that allows the purchase and shipment of food and electrical appliances to Cuba and other parts of the world using cryptocurrencies, and BitRemesas, from developer and influencer Erich García Cruz and his team. The latter is aimed at sending remittances from abroad while avoiding the high taxes and restrictions of traditional platforms such as Western Union.

Of course, the informal market also has an impact on how crypto assets move in Cuba. Some users of pyramid systems such as TrustInvesting and Attonbank take advantage of the profits generated by these schemes to sell them to people who run businesses recharging cellphones, MLC cards[1], and sending remittances, among others.

Homegrown Exchange Platforms and Communities

Even though few Cuban media outlets have addressed the issue of cryptocurrency management, this has not stopped information from reaching people, leading to the creation of communities for trading and exchanges. Some established sites such as CubaCripto, which has more than 1,300 members, offer platforms for information and exchange.

Forms of Acquisition in Cuba

Some users comment that they have acquired tokens through “faucets”, which are applications that offer fractions of cryptocurrencies in exchange for actions such as sharing content, solving Captchas, watching ads, or using beta versions of games and applications.

There are also the so-called “airdrops”, through which newly created cryptocurrencies are obtained. This is a way to encourage users to use new token denominations that are about to become available, thus incentivizing their entry into the community.

Others have preferred to use mining platforms in the cloud that work through referral links, meaning, the user registers and begins to generate Bitcoin fractions. When these reach the minimum necessary to make an extraction, the interested party must be able to attract a certain number of people (referrals) to register and complete the extraction. 

Until now, the most effective method continues to be buying cryptocurrencies directly, which was practically impossible to do from Cuba until the appearance of Fusyona (currently disabled) and Qvashop, which have taken the place of the exchange sites inaccessible to Cubans who cannot pay with credit cards abroad.

Fears Associated with the Use of Cryptocurrencies

With the growing persecution of illegal currency trafficking by the Cuban authorities, concerns also grow for those who use assets as a bargaining chip to access the credit of the Freely Convertible Currency (MLC) cards. This means that they are increasingly cautious about publishing ads in trading groups on WhatsApp and Telegram, as well as on Revolico and other classified ad sites, although the government has not directly expressed interest in exercising control over the trading of crypto assets.

Traders prefer to operate selectively and within their own communities according to a CubaCripto user who wished to remain anonymous.

Scams and other hoaxes used by unscrupulous people have also targeted the crypto arena. They take advantage of the anonymous and volatile nature of these tokens with monetary value and have devised scams posing as exchange companies or certified Traders. After their victims have been chosen (almost always people who are not familiar with the exchange procedures), they offer to sell them Bitcoin, but when the interested party makes the bank transfer or sends their pre-paid cellphone minutes (also transferable, and thus traded, in Cuba), they simply disappear without a trace.

This type of situation, in addition to the lack of information and market culture on the internet, has led some Cubans to have reservations about the use of cryptocurrencies in their financial operations.

The Future of Crypto in Cuba

On July 2^nd  on the television program Roundtable, the Minister of Economy and Planning of Cuba, Alejandro Gil Fernández, said that “the benefits of virtual currency are being studied,” but no concrete facts have been outlined by the Cuban State to normalize its use in the international market despite governments from Venezuela and Iran, two countries that also suffer from economic sanctions imposed by the United States, having done so.

Meanwhile, everyday Cubans are exploring the infinite possibilities offered by the possession and use of cryptocurrencies. Some see it as a way to make their savings grow and avoid using national banks that exercise control over and audit people´s finances. In addition, “it is an effective way to keep money moving and, of course, to make it grow through trading” according to Yoniel Suárez, a user of the social network Twitter.

There is still a long way to go for crypto assets to form part of Cuba´s economic and financial culture, however the Island is taking its first steps. It is expected that, sooner rather than later, the use of cryptocurrencies in Cuba will be as common as going to the agricultural market and paying for overpriced bananas, but this time from your cell phone with your electronic wallet.

Kmilo Noa is a writer, and technology and social management enthusiast. He resides in Holguín, Cuba. Find him on twitter @noakmilo_

Illustration by Wimar Verdecia Fuentes. Find him on twitter @FuentesWimar

[1] MLC stands for “Moneda Libremente Convertible” or “Freely Convertible Currency”