The Economist: Not even bitcoin escapes the control of this communist regime

Saily in yellow is an entrepreneur in a system that discourages diversity. In Havana he runs a boutique hotel, a cafeteria and a coworking space. He also teaches people about social media on Slyk, a website that has taken off in Cuba. Slyk gives you an online presence without having to create a website. Even more important, you can get paid for your work in cryptocurrencies.

Parts of Latin America and the Caribbean are experimenting with alternatives to cash. In September, Nayib Bukele, President of El Salvador, introduced a law that makes the bitcoin, a cryptocurrency, in legal tender. Bukele, who is increasingly authoritarian, pushed for the law even though few Salvadorans really want to use cryptocurrency.

It is possible that Nicolás Maduro, the autocrat of Venezuela, you will be hoping to grab some of the same headlines when you announced the new “digital bolivar”From the country in August. Being ‘digital‘In name alone, the new banknotes remove six zeros from a currency ravaged by years of hyperinflation. Venezuelans, tired of carrying bundles of cash, use mobile payments and debit cards.

Cuba is part of this trend, but, as always with the communist island, with a touch of its own. Interest in cryptocurrencies had been bubbling for a while, but took off properly late last year, when President Donald Trump imposed sanctions on organizations affiliated with the Cuban military. That included banks that process much-needed remittances from family members abroad.

Almost overnight, companies like Western Union they could no longer operate. This cut a lifeline in a country where payment companies like Visa, Mastercard, PayPal and Stripe they were already banned.

Accustomed to finding creative alternative solutions in desperate situations, Cubans abroad began offering to sell cryptocurrencies, such as bitcoin, to people on the island with mobile phones and technological know-how. The buyers would then deliver the purchase price in pesos to the seller’s family or friends.

Initially, many of these transactions occurred informally through social messaging applications. As cryptocurrencies became more common, people turned to specialized platforms, such as BitRemittances, founded in September 2020 by Erich garcia, a Cuban influencer from YouTube who makes videos on the Internet. BitRemesas matches cryptocurrency sellers outside the country with buyers on the island through auctions.

Now the Cuban government wants to intervene. In late August, the central bank announced that it would recognize and regulate the use of cryptocurrencies. As it usually happens in Cuba, the details of the new rules remain cryptic. But the government’s desire to crack down on a new technology comes at a troubling time.

In July, protests across the country were met with police repression and house arrests. The activists hoped to organize a peaceful march on November 15, but the government has denied them permission to do so. Rather than deal with their discontent, he claims that they are agents of the United States.

Many of those protesting in July were calling for reforms to an unjust financial system that requires Cubans lucky enough to have dollars to exchange them at a lousy rate for other currencies, or for prepaid cards to buy food and basic goods in state stores. . Cryptocurrencies could offer a lifeline for some. But it will take more than the world’s most decentralized currency to change one of the most centrally planned economies in the world.