Skirting U.S. sanctions, Cubans flock to cryptocurrency to shop online, send funds
13 September, 2019, 12:22 pm
HAVANA (Reuters) – Jason Sanchez, 35, was able to start buying spare parts online last year for his cellphone repair shop in Havana thanks to the advent of cryptocurrency trading in Communist-run Cuba.
Cuba, which in many ways remains stuck in the analogue past, may seem an unlikely hotbed for cryptocurrencies – digital tokens that use encryption techniques to secure transactions.
Yet the roll-out of mobile internet nearly a year ago has opened the way for cryptocurrency transactions, and enthusiasts have multiplied as the currency helps overcome obstacles created by U.S. sanctions on Cuba.
The decades-old U.S. trade embargo cuts Cubans off from conventional international payment systems and financial markets. Cubans cannot obtain credit or debit cards for international use on the island and struggle to do so abroad.
So Cubans like Sanchez are buying digital currencies, which are mostly unregulated, decentralized and anonymous, to make purchases online as well as to invest and trade.
“This is really opening new doors for us,” said Sanchez, who uses Bitcoin, the most well known cryptocurrency, to purchase parts not available new in Cuba from an online Chinese store.
Alex Sobrino, founder of the Telegram channel CubaCripto where Cubans debate and trade digital currencies, said he estimated some 10,000 Cubans were using them.
“We are using cryptocurrencies to top up our cellphones, to make purchases online, and there are even people reserving hotel rooms with (it),” said the 33-year-old, who trades crypto as a side gig to his family’s baking business.
To be sure, it is unlikely the digital coins will become a primary payment method for the Caribbean island’s 11.2 million inhabitants any time soon.
Cryptocurrency trading still falls in gray legal territory in Cuba.
And since Cubans mostly do not have credit cards, many have to ask relatives abroad to purchase them their first installment of cryptocurrency or buy within the community on social media channels like CubaCripto, which has more than 400 members.
Often the two sides of the deal meet face to face for the buyer to hand over cash and the seller to carry out the transaction on a laptop or phone.
Sanchez bought fractions of Bitcoin – which are worth around $10,000 each – through a startup founded a year ago by Cubans in Brazil that aims to make crypto purchases more businesslike.