Cuba to Consider Cryptocurrency in its Economic Plan 2020

Cryptocurrency in the future for Cuba? Image: Michael Wuensch

Cuba is considering the use of cryptocurrency as a part of the ongoing discussions on the new Economic Plan reforms. Cuba’s Councils of States and Ministers held a round table (mesa redonda) on Tuesday, broadcast on Cuban TV and attended by President Miguel Diaz-Canel.

What emerged from those discussions is that the government is considering the use of cryptocurrency as a means to manage increased U.S. sanctions, strengthen its economy and assist in market reforms.

The announcement by President Diaz-Canel to study cryptocurrency was made alongside other economic plans including the news of diversifying exports, increasing salary and pensions and other market reforms.

Cryptocurrency is a digital asset which uses encryption techniques to transfer funds between stakeholders. It functions independently of the dollar-centered world financial system and provides an alternative means for monetary transactions. The system makes sense because the central bank system does not function for Cuba and its trade partners/investors in light of the problems created by the U.S. blockade. Cryptocurrency in itself is beyond the restrictions and confiscations commonly encountered by the extraterritorial nature of the regulations of one nation such as the United States.

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Diaz-Canel indicted that the cryptocurrency plan is aimed to raise national production and boost economic growth.

Economic and Planning Minister Alejandro Gil discussed the economic department’s new flexibility for its National Development Plan 2030 as, “not static, and that can be changed depending the context.”

Gil said Cuba was considering cryptocurrency to create a more sustainable economy less affected by the whims of the U.S. administration under Trump.

During the televised discussion Gil said, “We are considering studying the application of cryptocurrency in national and international commercial relations. You have to see how you can incorporate measures of this type that allow us to move forward looking for a solution to the problems.”

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The new economic measures will include increased focus and efforts in the renewable energy, tourism, and communication sectors.

On the subject of tourism the minister stated, “We propose that the currencies that enter the country … go toward paying the national companies for the services they receive. … so that the foreign currency that is paid does not leave the country anymore and stays here and enters the production chains of national industries.”

Gil also said that financial service companies would be established to provide quicker and easier access to funds as an improvement over the centralized planning system currently in place.

The use of cryptocurrency makes incredible sense in light of U.S. sanctions and the problems international banks face providing services to Cuba by way of extortionate fines imposed by the U.S. Treasury.

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Cuba and its international trade partners have faced tortuous restrictions on its ability to conduct financial transactions using dollar based currency, as a result of harsh fines imposed by the U.S. Treasury. The country is therefore analyzing wisely, the use of cryptocurrency as a possible alternative.

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