When the wealthiest nation in the world has established sanctions against a country, that nation has to think of some special ideas to make things easier for itself. With the Donald trump Government announcing fresh sanctions against Cuba, the country is planning the use of cryptocurrencies to facilitate the progress of its economy. With the worsening economic scenario in Venezuela, which was an ally, the other sources of financial aid has also dried up for Cuba.
The minister of economy of the communist government, Alejandro Gil Fernande, recently said,” We are studying the potential use of cryptocurrency… and we are working on that together with academics.” The ultimate aim of the Government is to raise the domestic production levels along with the demands in order to support growth and counter balance the segments of tourism and foreign investment which have been hit by the US sanctions.
Venezuela too had declared its ambitious plans to introduce its own cryptocurrency “petro” but the project is still gathering momentum and failed to attract much international interest. Other states like Iran, which faces severe US sanctions, have showed similar intentions. In the case of Cuba, it is not clear whether it plans to launch a new currency or use an existing one, like the bitcoin. According to the Cuban Government, the launch of a cryptocurrency will boost the age-old modules of the economy by bringing in some form of decentralization. There are also plans to allow the companies operating in the Mariel Special Economic Zone of Cuba to receive a portion of their sales in hard currency.
The decentralized operating pattern of blockchain based currencies allow them to operate past the censorship barriers and provides an edge to the financially troubled states. Many experts believe that countries developing their own cryptocurrencies form the next stage of the blockchain evolution. Though the Cuban economy is cash based, the anonymity and transparency associated with cryptocurrency, along with its dynamic nature, can bring about a change in the mind-set of the people.
The optimistic tone of the Cuban Government is not shared by the citizens, some of whom were interviewed by Reuters. They feel that such measures are not enough to revive the disappointing economic scenario of the country.
The US had earlier imposed a ban on all non-family travel to the island nation and placed severe restrictions on the money that Cuban Americans can sent back to their families in Cuba. The Cuban Americans are now allowed to send $1,000 every three months to the island. These measures are a part of the policy of the US Government to combat the effects of communism and human rights abuses.
The coming months will tell us the direction that the Cuban crypto-conundrum will be heading towards.