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Bitcoin spreads in Cuba because of the local economic situation - Binaryx

Bitcoin spreads in Cuba because of the local economic situation

Traditional currencies in Cuba are showing worrying signs of instability when Bitcoin makes step by step very confidently. Analysts watch a picture when communism is encountering enormous pressure from all representatives of a society fighting with costs rise, inflation, protestations, and destabilizing economic reasons. In this case, dollars and euros are more trusted in comparison with the national currency. Surprisingly, Bitcoin’s popularity in Cuba has also increased due to political issues. 

The latter attempts to close the existence of the dual currency mechanism have also caused protests. At present, Cuba practices using Peso and CUC. The latter currency is taking away gradually, which can explain the demand for Bitcoin. Cubans citizens are seeking to get more steady cash to win over the economic crisis. 

Cubans are facing difficulties in gaining hard money – coins or paper cash. Traders also have hard times as a liquidity crunch has affected usual operations. Banks and big financial enterprises have no cash to give loans to traders. Even daily things and services are difficult to purchase.

A curious fact that the government created ‘Dollar Stores’ to accumulate in some necessary money into the system and also to strengthen its stocks. Famous economist Omar Everleny supposes the government is trying to dollarize the Cuban economy by leaving the CUC.

Exponential increasing of Bitcoin’s demand in Cuba

Taking into the attention many factors that caused the rise, Bitcoin demand in Cuba will only increase in the future. Bitcoin is already a functional currency for regulating. His limited amount due to increasingly difficult mining makes it a stable digital investment. 

Dollars and Euros are very hard to get by, and Bitcoin becomes a worthy alternative. Cubans are fond of the border-agnostic character of virtual currencies. The opportunity to commit global transactions makes it more beneficial. Notwithstanding, it is too early to forecast whether Bitcoin demand in Cuba will support the struggling economy or will ruin it at the end.