Is there a potential in Cuba for Facebook’s crypto?
Cuba is one more politicly isolated country that is exploring cryptocurrency use. In this way, they are also considering Facebook’s Libra and feel quite optimistic about it. Claudia Rodriguez is a Cuban expert that works for the Brazilian startup Fusyona, the individual bitcoin exchange with the service in Cuba. She stated that the exchange has nearly 700 accounts, collected since the beginning in 2018. She also pointed out that 60 users get one or two bitcoins every week, which is much for Cuba. So, the country is probably going to be very interesting for Facebook’s Libra that also could see potential in Cuba, as Rodriguez believes.
Since it announced Libra, Facebook is focused on the potential to connect the world’s underbanked with digital financial services.
Brasilian startup partners with local lawyers
Fusyona made partnerships with five anonymous volunteers in Cuba. They need to stay unknown for now, because Cuban regulations neither forbid nor permit bitcoin trading. The startup is collaborating with local lawyers in the hope of finding a 100 % legal way to allow peer-to-peer trades in Cuba.
In the same time, the communist party in Cuba announced they have plans to develop a national cryptocurrency as well. Yet, the government-backed financial institutions in this co country don’t enjoy quite a trust of many Cubans due to many public manipulations in the past.
Elvis Morales is Cuban crypto entrepreneur who works in Seattle and told for the source he was using bitcoin for different payments for the family in Cuba. But, the only problem is how to transfer crypto to actual money in Cuba. He explained the issue is they don’t have credit cards. Banks are not usefull on the island.
With previous issues, bitcoin users in Cuba believe that Facebook’s crypto Libra could open many doors and would be widely accepted. But at the moment, enabling the use of this stablecoin is far, far away.
Regulatory barriers for Libra
Switzerland-based Libra Association never gave any signs it could become mainstream crypto in Cuba.
Facebook but also WhatsApp are the most used applications in Cuba. Still, the Libra white paper has other priorities, and there aren’t any plans to make the Calibra wallet accessible in Cuba, due to American sanctions.
Facebook is already facing a severe regulatory reaction, calling from lawmakers for the company to stop developing Libra.
However, according to one regulatory lawyer, money transfers to vetted individuals in Cuba isn’t illegal. But he also said it does grow regulatory risks that the Libra Association may prefer to avoid altogether.
In 2018, most Cubans got mobile internet access, even censored and expensive. They use the most WhatsApp and Facebook applications. Most crypto exchange platforms exclude Cuba completely, so liquidation mostly happens through informal swaps.
Yet, some evidence indicates that Americans have transactions with Cubans despite sanctions. Western Union, for example, operates on the island with specific restrictions regarding amounts and recipients.
Bitcoin already offers Cubans global access to censorship-resistant transactions, despite local liquidation options. Libra can’t provide the same. It would be accessible to Cubans without banking rails and traditional partnerships to assure companies accepted coins on the ground.