Young entrepreneurs in Cuba have found solutions for the country’s payment problems through cryptocurrencies after the Trump Administration imposed new sanctions on the Island in November.
According to a report published by Deutsche Welle, startups in the Island nation are using Bitcoin, Ethereum, and other cryptocurrencies to fill the gap created after Western Union closed more than 400 branches in the country amid financial restrictions.
The Cuban government has not been able to introduce regulations related to crypto-assets and that is why many companies in the country are exploring options to use digital assets instead of the US Dollar. Since the ban, Cuba experienced a significant rise in interest related to bitcoin.
Many Cuban citizens are working outside the country and send valuable reserves every month to their family members. Western Union was the most important payment method for them, but now the Cuban diaspora are finding alternative ways to send money to the island nation.
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There are few startups currently helping that cause, one is BitRemesas, the company transfers money in the form of bitcoin, Ethereum, dogecoin and other digital currencies. BitRemesas is currently helping people in Cuba to receive money in the local currency.
Because of recent events, the country is planning to shift focus to cryptocurrencies in order to reduce dependency on the US Dollar. In addition to the recent step by Western Union, several other companies including Visa, PayPal, and Mastercard have also made it difficult for the citizens in Cuba to use their services.
While outlining a possible solution for the issue, Erich Garcia, Founder of BitRemesas, said: “Someone from the U.S. sends a relative through BitRemesas $100 in bitcoins. We receive this $100 in bitcoins and organize an auction, let’s call it ‘negative’. There are many Cubans who want to buy cryptocurrencies. As few bitcoins as possible are auctioned. There are cases where someone buys bitcoins for the equivalent of 88 or 92 or 93 U.S. dollars. The difference in Bitcoin is, in this case, the gain of BitRemesas.”