What does the cryptocurrency market look like in Cuba?

By Alberto C. Toppin (El Toque)

HAVANA TIMES — Many Cubans had never heard of cryptocurrency four years ago. They were just starting to access the internet and didn’t know words like “bitcoin” and “blockchain”.

Today, however, people are talking about a cryptocurrency market, with users from all provinces. Twitter account Room talked about the development, prospects and challenges of this market on How is the cryptocurrency market in Cuba?, with the contribution of founders of companies related to the world of crypto.

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Respondents gave many reasons why cryptocurrencies were adopted as a means of payment early on. “The current cryptocurrency situation is linked to the informal Cuban dollar and euro market and is a result of the measures taken in 2019 with the opening of stores that accept only MLC (a magnetic currency used with prices in USD)”, Adrian C. Léon intervened, the founder of Fusyona, one of the first Exchanges which offered cryptocurrency to Cuban customers this year.

The decision to introduce the MLC prevented informal buyers and sellers from accessing the currency they needed to travel and severely impacted their businesses, Leon continued, speaking of people leaving Cuba to buy products. which they would then resell on the island. Because their businesses were hit hard, sellers and other Cubans chose to emigrate, and for that they had to withdraw more than $5,000 that customs allow you in cash. “People’s best bet was cryptocurrency,” he noted.

According to Adrian C. Leon, the long-standing migration crisis means more Cubans are out of the country and have to transfer money to their families on the island. “People who knew crypto are still using it,” he says, referring to crypto as a way to send money to Cuba without government intervention.

“The transfer of value is the main purpose given to cryptocurrency in Cuba today, which is its inherent nature,” explains Erich Garcia Cruz, founder of BitRemesas and QvaPAy; two well-known Cuban companies that work with cryptoassets. “This value transfer results in discounts, in reserve. There are many people who prefer to save their income or buy cryptocurrency to be bothered,” he added.

Garcia Cruz also revealed other benefits of using cryptocurrency in the Cuban context, especially in the business world. “I love that people are also discovering the full potential of crypto to create virtual stores, buy or sell services or products online in Cuba and abroad for Cubans,” he said.

However, he adds that these benefits are not yet being exploited by the business community. “Right now the focus is on sending funds or financial speculation between them, as far as the MLC is concerned,” he noted.

The influencer also advocated using crypto as a channel for business growth, not a means to an end. “Cubans with CUP (regular pesos) used to be unable to buy anything on the Internet; now a Cuba with CUP can, via a service.

According to Mario Mazzola, founder of the Qbita exchange, the existence of unclear investment plans has also led many Cuban fans to cryptocurrency. “The reality is that a lot of people have been scammed, but it has been very important to educate people about it. Maybe people have dipped their toes in this world for the wrong reason, with the idea of ​​magically making millions, but they have learned a lot of useful things about technology, how it works and how to manage a digital wallet.

Mazzola also pointed out that the idea of ​​chasing millions with cryptocurrency has led some Cubans to invest their money in cryptoassets and wait for the value to rise, an investment strategy called “holding.” It worked for some people; others didn’t understand the true value of this technology at first, they followed with promises of magical gains, and we know how this story ends.

During Room, Abraham Calas, director of development and innovation of elTOQUE, presented the updated representative rate of cryptocurrency in the informal market, as well as a calculator to understand the cryptocurrency equivalent of a given amount in Cuban currency (CUP or MLC). The calculator uses the price values ​​as a reference.

When it comes to the tolls and challenges of adopting cryptocurrency, Cuban businessman Luilver Garces emphasized that one should always look for “digestible” end products. “If you can get a kid to understand what cryptocurrency is, you’ve won; if you manage to get your grandmother to understand what cryptocurrency is, you’ve won, but you won’t do it until it happens, there’s still a lot of work to do,” he said.

One of the most interesting things to see in the Cuban crypto market is that the dollar is considered a fraction of cryptocurrencies. In this regard, Erich Garcia Cruz said that this phenomenon occurs because of people’s fear of price volatility. “People always buy or sell prices against the dollar.”

“This experience taught me that a lot of people were just using other currencies, not crypto per se,” says Liuver Garces, referring to the work of platforms such as PayPal. “The phenomenon of placing cryptocurrency against the dollar as a benchmark in trading may be because people started talking in dollars,” he says.

Regarding the differences between prices in the Cuban and international markets, Adrian C. Leon explained that this is a result of the decentralization of cryptocurrency. “The price of bitcoin in Cuba has nothing to do with the price in the United States, with the price in Brazil, and it will happen to other countries.”

Cryptocurrency is not yet widely accepted in Cuba and Mario Mazzola pointed out that this could be due to how it works as it focuses on peer-to-peer operations and you need a digital wallet. “It’s not that easy for someone who isn’t very motivated to embark on this learning journey.”

According to Mazzola, the lack of confidence created by unclear investment plans also had an impact and led people to stay away from cryptoassets, in addition to price volatility.

Liulver Garcia believes that the late access of people to the internet on a large scale in Cuba, in 2018, has meant that there is not much knowledge about topics related to blockchain and cryptocurrency such as bitcoin. “First of all, we need to automate the country, learn a whole bunch of concepts that weren’t born with the Internet for four years until now, but that existed and existed before the Internet, such as privacy and data protection,” he explained.

“The challenge is more pedagogical than technological,” emphasizes Erich Garcia Cruz. “There are cryptocurrency processes that don’t require players to know exactly what a private key is or how to encrypt a transaction on the blockchain,” he said. In addition, he cited the Moon Wallet – a digital wallet that enables instant bitcoin transactions – as an example, and the lack of knowledge about how exactly it works.

In the last part of Room, some interviewees expressed their views on what would be the best course of action in an environment where bitcoin has very low prices. “If bitcoin is below 20,000 right now – which it isn’t, it’s higher – I’d wait for it to drop to 15,000, say, to get out and buy; and if I have bitcoin that I bought at a low price, I would wait for it to hit 30,000,” said Luilver Garces.

“If you believe in bitcoin, it is better to buy it when it is worth 20,000 and not when it is worth 68,000,” advised Mario Mazzola, explaining that it is not a good idea to sell personal assets to do so. . .

“My biggest recommendation is to always follow the basic rule of trading (buy/sell to make a profit), which is never invest more than you are willing to lose,” said Adrian C. Leon, founder of Fusyona.

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