It would seem to me that in a country like Cuba – where until recently we were struggling to deal with two currencies, the Cuban Peso and the Convertible Peso – that the addition of a third currency, such as Bitcoin would only bring more headaches.
In the summer of 2020, the government transformed seventy-two stores in the country, reopening them to sell products in U.S. dollars and Euros. It’s not so easy to buy things in these new stores. In order to make a purchase, you must first open a bank account in one of these currencies with a magnetic card linked to the account because all sales in the new stores are with cards, no cash allowed. For most people, having the money saved is the first issue. Then you must open the account before going to the store and wait in line to buy food and toiletries, two of the “most wanted” categories of products during the pandemic.
…all I could think was – “Two currencies is enough for me!” – wondering why I should even bother to try to understand a new currency and incorporate another exchange rate into my daily life.
Lots of Cubans with family abroad, or who those who travel to other countries themselves, already have cash savings in foreign currency. With the Cuban borders closed due to COVID, actually traveling and bringing the currency on your own is no longer an option. As a result, a special secret underground market started to emerge through WhatsApp to buy foreign currencies. Just when I thought things couldn’t get more complicated, suddenly everybody was talking about bitcoin.
…the recent 8th Communist Party Congress proposed a new lineamiento calling on the country “to move forward with the study of crypto-assets in the current conditions of the economy”.
While I was still trying to understand the remedial math of 1 CUC equals 24 CUP (except for when it is actually worth 50 CUP), my friends began to sing the praises of Bitcoin in Cuba as a way to make purchases, save money and even multiply savings. When some friends invited me to join them in this new quest, all I could think was – “Two currencies is enough for me!” – wondering why I should even bother to try to understand a new currency and incorporate another exchange rate into my daily life. I got the answer from a friend’s mom, Alina, a family doctor in her 50s, who started to invest in bitcoins or btc two months ago.
“I don’t know if this is going to last. There is always a fear in every business you start, there are always risks, but if you don’t take them you won’t make any profits. I would like to have a business of my own but there are a lot of bureaucratic obstacles so I decided to invest here and see what happens.”
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She first heard of crypto assets, like Bitcoin in Cuba through Facebook and WhatsApp groups and then her son walked her through the process. She started reading articles and watching videos on the internet and even on Cuban television to try to decide whether or not to invest in a new crypto assets company that everybody in her city of Las Tunas was talking about. Since last fall it has been the talk of the town. Everybody seems to be investing in a company called Trust Investing. Rumor has it that “some of them have already furnished their houses, bought a motorcycle or used the bitcoins to put money in their cellphones.” As far as she knows, her hometown in Las Tunas is the epicenter of Cuban bitcoin investing and it has become very popular. There is even a restaurant that accepts payments in bitcoins and they advertise it in their WhatsApp groups. You can go and consume 50 CUC or 50 dollars in food and beverages and pay with your Trust Investing Bitcoin wallet. The most popular payment method is transferring bitcoin between Trust Investing members’ accounts.
“When you do it like that, there are no penalties, but if you withdraw your money, then they charge you a 5% commission”, explains Yoel, another tunero. He got involved in Bitcoin for one reason and one reason only: to save money and to watch it grow.
“It’s like having your money in a bank account, the difference being that when you put your money in a real bank, you have to wait years to make it grow, you have to wait in line to make deposits and with this, you don’t even have to go out. You just need your E-wallet and you get into the system.”
But what is an E-wallet and how do you get into the system? Many users in Central Cuba have come to Bitcoin through the company, Trust Investing. The excited testimonies of people doubling their investments in a short amount of time give listeners hope and help recruit members for a pyramid scheme that works only as long as new members are added continually. While the skeptics claim that it is just the latest in a long tradition of Ponzi schemes that will fall apart at any time, those who have invested choose to believe their friends and neighbors’ stories of success and hope for a brighter future. Leaders of teams in the Trust Investing company pay no attention to the naysayers.
So eager to understand how it works, people are jumping in, burning through megabytes of cellphone data to watch videos online to see if it is actually that easy. A popular Cuban YouTuber and influencer, Erich J. García Cruz, CEO of online store Bache Cubano, has devoted several videos in his YouTube channel to explain how to enter the bitcoin world, as well as highlighting the risks and benefits. Camilo Condis, another Cuban influencer, got some serious traffic on his Twitter account when, after the death of Bernie Maddoff, he expressed his sympathies to the Trust Investing Company for the loss of a great role model.
Even without dipping into the data, it is possible to learn more by simply tuning in to Cuban television. For many Cubans seeing something on a foreign TV program lends an aura of believability. Russia Today, a recent addition to the national broadcasting system, screens a weekly program called Keiser Report where journalist Max Keiser talks about crypto assets.
Recently it seems like Bitcoin is popping up everywhere, as we say in Cuba, “Hasta en los vasos espirituales”. When the international media company TeleSur was hiring new employees for their office in Havana, they offered employees the option of receiving their salaries in Cuban pesos or bitcoin.
For those who have doubts as to whether this newest currency will be just a passing fad or if we will have to eventually figure out how to make space for another currency in our daily calculations of how to buy the ingredients we need for dinner, the recent 8th Communist Party Congress proposed a new lineamiento calling on the country “to move forward with the study of crypto-assets in the current conditions of the economy”.
So, 24 Cuban Pesos are 1 Convertible Peso, or at least they will be until the CUC disappears (forever?) on June 30th, 2021. As I write this article, 1 USD is worth 24 Cuban pesos, but you can’t get any at the bank so you have to buy them in the black market at 50 to 1. Economic uncertainties mean that Cubans’ daily lives are continuously changing and we are constantly challenged to find more creative ways to go with the flow “sin coger lucha”. I wouldn’t be surprised if 24 Cuban pesos was worth 1 USD someday. In the meantime, I wonder how many bitcoins I can get for that?