Bitcoin demand in Cuba rises as economy struggles

Bitcoin demand in Cuba rises as economy struggles

Bitcoin demand in Cuba is rising as traditional currencies are increasingly showing signs of instability. The communist regime is facing huge pressure from all quarters of a society struggling with price rise, inflation, protests, and destabilizing economic factors. Consequently, dollars and euros are being preferred more. Interestingly, Bitcoin demand in Cuba has also risen due to these factors.

The recent efforts to put an end to the dual currency mechanism of the nation have also sparked protests. Cuba currently uses Peso and CUC (the dollar-pegged Convertible Peso). The latter is being phased out, prompting the demand for Bitcoin. Cubans are rushing to get less volatile currencies to tide over the economic crisis.

Bitcoin demand in Cuba rising due to economic instability

Citizens are finding it difficult to acquire hard money. Traders are facing hardships as liquidity crunch is affecting their daily operations. Banks and other large financial institutions have no money to lend to the traders. Even daily commodities are hard to get by.

Trade sanctions, akin to Iranian sanctions, have immensely affected the flow of dollars into the economy. The recent push by American President Donald Trump to restrict trading activities with Cuba has led to a shortfall of high-value currencies in the South American nation. Interestingly, ‘Dollar Stores’ has been launched by the government to pump in some much needed good money into the system and also to shore up its reserves. Economist Omar Everleny says the government is trying to dollarize the Cuban economy by abandoning the CUC.

Bitcoin demand in Cuba will increase exponentially

With so many factors behind the rise, Bitcoin demand in Cuba is only going to increase further. Bitcoin is already well-regulated, and its limited supply due to increasingly difficult mining makes it a stable digital asset.

Since dollars and Euros are very hard to get by, Bitcoin is coming up as a viable alternative. Cubans love the border-agnostic nature of virtual currencies. The ability to undertake global transactions makes it more attractive. However, it is too early to predict whether Bitcoin demand in Cuba will eventually support the struggling economy.

Image Source: Pixabay

Gurpreet Thind

Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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