“No way! You can’t give the bank anything.” says Lisandra Pupo, a 30-year-old mechanical engineer who is skeptical of the banking of economic operations that the Cuban central bankwhich tries to reduce the number of banknotes circulating on the streets.

The new regulations, which came into force last Thursday, will require both citizens and businesses to carry out the bulk of their transactions through electronic channels within a six-month period. But many Cubans understand that the facility will make it difficult to earn their own money because of the island’s technological shortcomings.

Pupo, like many Havanans, assures that he would rather have his money in his hands. He complains that many ATMs are useless and if they have cash they can only withdraw 5,000 pesos (about $28).

“That is impossible. Now the ATM has no money or no connectionand “in the times we live in, 5,000 pesos is just nothing,” he tells the AFP leaving his job in Cerro, a densely populated municipality in Havana.

Since the government implemented a monetary reform in January 2021, it has become increasingly common for Cubans to carry stacks of bills in bags or backpacks to pay a simple restaurant bill or a service in a mechanical workshop.

“Today, there is a significant amount of cash that resides outside the banking system. This money does not circulate in the logical circuits of the economy and is only traded between natural persons,” Joaquín Alonso, president of the Central Bank, told a state television program on Monday.

“It is tiring!”

When monetary reform was implemented, the bank injected a significant amount of working capital into “give the population purchasing powerbefore the expected price increase that accompanied an average wage increase of 450%.

The authorities recognize that they face major challenges due to the lack of resources to install payment terminals and update the ATM network in all branches of the country.

For the government, transferring and storing cash, in addition to making paper bills with security measures, is burdensome. “Making money costs foreign exchangeAlonso argued.

Rossel Garcés, a 32-year-old self-employed printer, believes putting his money in the bank is a problem.

Knowing “that I can only withdraw 5,000 pesos, that I have waited in line for three hours, I am going to another bank, I am going to wait in another line to withdraw another 5,000. Am I going to take a week to extract 20,000 pesos?”, he wonders.

He also states that many people do not have smartphones to make transfers. “It’s exhausting!” he emphasises.

“Deficits” and “inflation”

Independent Cuban economist Omar Everleny Pérez believes that “such high prices and the lack of high denominations” made “this bankarization necessary”.

The government is concerned about the high currency level as it is “encouraging the spiral of inflation”explains the president of the Central Bank.

Year-on-year inflation reached 45.8% in May, up from 39% in 2022 according to official figures, but analysts have indicated it has already reached triple digits.

The announcement also coincides with record prices of the dollar (240 pesos) and the euro (245) in the informal market, according to the independent portal El Toque, which publishes a daily board. These parities control the street economy on the island.

The fast-growing private SMEs, which only received a permit two years ago, were also not happy with the news because they will now have to carry out all their actions electronically.

These companies need dollars to export their imports and it is difficult for them to acquire it on the official market.

“If yesterday it was extremely difficult for an MSME to produce, tomorrow it will be even more difficult” said Oniel Díaz, a private business consultant, in a post on his Facebook page.

SMEs will lose their import capacity “in an environment of scarcity and inflation”, he adds.

The government recently admitted that 100% of the food basket is importedin the midst of the worst economic crisis in three decades.

There were also complaints about the networks. “They encourage individuals to import foreign currency and sell in national currency, without creating measures for individuals to recover and reinvest their USD (dollars),” said a user of the social network X, formerly Twitter .