Cubans Circumvent Embargoes with Crypto Shopping
Crypto assets are truly international - and helping break out of embargoes.
Cuba, the island nation suffering decades-long embargoes with the US, has turned to cryptocurrencies to procure goods from a globalized e-commerce world. The spread of mobile internet in the past year allowed Cubans to shop online for goods that are a given for most markets, reported Reuters.
Beyond direct trade, Cubans are cut off from acquiring banking services, debit and credit cards. But locals still have ways to acquire crypto assets, and those are still censorship-free. Jason Sanchez, owner of a mobile repair shop, uses Bitcoin (BTC) as a way to acquire phone parts and other essentials.
Cubans are some of the users of crypto payments to top up mobile phones, one of the most widely applied use cases for BTC and other major coins. Acquiring and trading crypto assets is usually happening on a small scale and informally, through the Cuba Cripto Telegram chat.
Unfortunately, Cubans would still be banned from participating in the larger crypto economy, as exchanges apply almost the same restrictions as banking services. The country itself does not regulate cryptocurrencies. Fusyona, the first crypto exchange in the country, is also one of the tools for Cubans to connect to the global economy. The exchange, buying and selling some of the largest coins, also offers crypto-based international remittances.
Acquiring crypto assets is also possible from Cuban nationals based abroad. Brazil is usually the hotspot for those exchanges, as the country is one of the biggest BTC markets in the region.
The case of Cuba resembles that of Venezuela, the country that has been cut off from the US economy by embargoes. Hyperinflation also led to high local demand for BTC, leading to a spike in LocalBitcoins activity. Peru, Costa Rica, and other countries in the region also show a marked increase in BTC trades.
Based on recent research, Brazil also sees significant inflows of BTC from almost all major crypto-friendly countries, including the US, Singapore and the EU as the biggest sources. In effect, the flows of BTC are working to break the Cuban embargo.
Still, the local use of crypto coins is limited, as generally using BTC for internet purchases is rather limited. In some cases, using BitPay is once again restricted by KYC procedures for any significant spending.