Cuba sees cryptocurrency interest surge amid lack of regulation

Amid a distinct lack of regulation, a surge in cryptocurrency activity is pouring into Cuba, according to executives at local crypto companies.

In early November, Cuba saw a significant spike in Bitcoin (BTC)-related Google queries, suggesting an increase in crypto activity in the country. The founders of major local crypto exchanges Qbita and Bitremesas told Cointelegraph that their platforms have seen an increase in activity in recent months.

Bitremesas founder Erich Garcia told Cointelegraph that the platform has been growing steadily this year, with a noticeable increase in user activity. So far, usage of the service has been growing at a rate of 200% per month.

Mario Mazzola, founder of the Qbita exchange, said: "Bitcoin usage and trading volumes are exploding in Cuba right now." The executive said Qbita's trading volume in October was equivalent to the total trading volume in July, August and September combined.

However, both executives noted that Cuba has yet to determine the regulatory status of crypto-related activities. Garcia said that amid this regulatory uncertainty, some entrepreneurs are entering the crypto space.

"Cryptocurrencies are not regulated in Cuba right now, and the government so far does not consider these tokens to be real money. Moreover, many entrepreneurs are moving their business activities to this global, more powerful currency."

Qbita’s Mazzola said Cuba has “completely deregulated cryptocurrencies,” while at the same time the local government recognizes cryptocurrencies as a means of circumventing sanctions. He said:

"In Cuba, cryptocurrencies are completely deregulated. They are neither legal nor illegal. In fact, representatives of the Cuban government have suggested on television several times that the authorities are bullish on cryptocurrencies."

Since cryptocurrencies still have no specific legal status in Cuba, the operation of local crypto exchanges may raise regulatory issues, but Qbita’s founder is confident that local crypto businesses will not be in danger as there are also no laws that explicitly prohibit them from operating.

“This peer-to-peer transaction is completely legal because there is no law in Cuba that prohibits people from buying, holding, using and selling Bitcoin to others,” Mazzola said.

According to Mazzola, the local currency reform may be one of the main reasons for the rise in interest in cryptocurrencies in Cuba. The Cuban government plans to abolish the dual-currency-based economic model, eliminating the Cuban Convertible Peso and retaining the Cuban Peso. Mazzola said:

“The rise of Bitcoin in Cuba is due to the government’s recent announcement of major monetary reforms involving currency unification (CUC disappears, CUP remains) and the devaluation of the CUP against the dollar. As a result, people are using Bitcoin to avoid the negative effects of inflation and currency devaluation on their savings.”

As previously reported, Cuba’s growing interest in cryptocurrencies is partly due to the lack of digital financial services in the country. Major companies such as PayPal and Stripe do not provide services to Cuban nationals.

The restrictions on access to financial services in Cuba extend not only to traditional payment companies, but also to global crypto companies such as Paxful and LocalBitcoins. Jukka Blomberg, chief marketing officer of Finland-based LocalBitcoins, said:

"Cuba is on the OFAC sanctions list and we have contractual obligations with some of our partners that mean we cannot operate in Cuba. I'm not sure if this will change in the future, however, unfortunately, this is the current situation."