Cuba wants to strengthen its finances and bypass the US sanctions by using cryptocurrency
In the current adoption of blockchain technology and the cryptocurrency, we could see several cases where certain countries, in the situation of economic blockades by large world entities, applied new financial methods to maintain a regular financial flow of funds and prevent the outflow of money from the country. Take, for example, Venezuela, which, by accepting the cryptocurrency, and launching its own Petro, was intended to circumvent the economic sanctions imposed on this Latin country by the US. Furthermore, Cuba is the newest country to consider the possibility of using cryptocurrency to counter US sanctions, judging by the latest Reuters statement, using the proven government sources on July 3 this year.
To recall, Cuba felt the powerful effect of the crisis in Venezuela, which was previously the primary source of help. Both countries are currently undergoing a financial and economic crisis.
The cryptocurrency as a part of a package of announced reforms in Cuba
In a public appearance in Cuban state television, country president Miguel Diaz-Canel said the new plan could make a big difference and that the government could raise funds for about a quarter of the population by helping to pay for reforms.
Further, Alejandro Gil Fernandez, the minister of economy of Cuba made clear in the same light that the government is considering the potential use of cryptocurrency, both in national and international commercial transactions. He assured the public that leading experts and academics work on the new project.
According to the Cuban government minister, Gilles Fernandez, Cuba is striving for reforms that will be sponsored by cryptos. Such changes could lead to a particular form of decentralization in the economy that still works, to a great extent, on Soviet principles. Adoption should lead to increased national production and demand and boost its growth. Likewise, pensions and salaries in the public sector could be doubled, using this package.
There are also plans to allow companies operating in the Cuban exclusive economic zone – Mariel, to get a share of the sale in hard currency.
It is not clear if the government will create its own token
Let’s recall, Venezuela launched its state cryptocurrency Petro last year. It is also designed to avoid sanctions, but its use has so far been restricted due to a lack of interest around the world. Other states are thinking of what follows, such as Iran, which faces an increasingly antagonistic US admission.
The question that remains open and unanswered is still whether Cuba is planning to launch its own crypto token or use existing crypto entities such as the world’s most famous digital currency Bitcoin (BTC) for new business transactions and avoiding sanctions.