For the first time in the history of Cuba, the U.S. Dollar (USD) has lost value to another currency, living entirely on the internet without an army to back it, Bitcoin. The cryptocurrency has been trading at a premium against the United States currency in cash.
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As reported by Alex Gladstein, Chief Strategy Officer for the Human Rights Foundation, and Enrique Yecier, a Cuban citizen, via their Twitter accounts, the historic shift in currencies values extend to the main cryptocurrencies, Bitcoin, Ethereum, and stablecoin Tether, a digital currency pegged to the U.S. Dollar.
$1 of Bitcoin or Tether now at a premium inside Cuba versus $1 of paper cash.
Feels historic. https://t.co/An0UiuTwCK
— Alex Gladstein 🌋 ⚡ (@gladstein) December 18, 2021
Due to the political tensions between the U.S. and Cuba, the island has been cut off from the international financial system and its payment rails. At the same time, the North American country has seen one of the biggest migrations from Cuban citizens.
This has created a situation where a lot of Cubans rely on remittances sent by their families abroad, but the national methods to receive or send a U.S. dollar transaction always affect the citizen. Therefore, crypto payments with Bitcoin and other coins, without the intervention of a third party, and more efficient in terms of fees and time.
In addition, Cubans use digital assets to protect themselves against inflation and the depreciation of their national currency. As a result, according to local reports, businesses and merchants have begun accepting Bitcoin and other cryptocurrencies as payment methods.
The Cuban citizen that made the viral report on the value of Bitcoin surpassing the U.S. dollar on the island, Enrique Yecier, claimed the following on this historical phenomenon:
Complaining that in Cuba a dollar in crypto has surpassed the value of 1 dollar in cash, is like complaining that Bitcoin today costs more than 46 thousand dollars when a year ago it cost 23 thousand. If there is someone doing things wrong, it is not BTC.
Bitcoin Not The Most Valuable Cryptocurrency In Cuba?
Cuba seems to be slowly, but surely moving into greater Bitcoin and crypto adoption. Per an AFP report, the national government granted merchants a license to operate with these digital assets back in August.
The measures fall into regulation 215, the report claims, issued by the Central Bank of Cuba. The new rules have been validated since September 15th and are aimed to regulate the use of cryptocurrencies for commercial transactions.
Cuba will recognize and regulate crypto for payments on the island https://t.co/nwZRGaB3rZ
— Bloomberg (@business) August 27, 2021
The country is still far from occupying a relevant spot in terms of adoption, as noted by Chainalysis in its 2021 report. The top ten countries with the most Bitcoin and crypto adoption have one thing in common, most are facing a high inflationary economy or a military conflict, as demonstrated by the inclusion of Argentina, Ukraine, Venezuela, Afghanistan, and others.
According to Yecer, Bitcoin it’s not the most valuable digital asset on the tropical island. This position goes to TRX (around $0,081162) which can go for as much as 8 CUP per token when a fair price should be around 6.15 CUP, the Cuban citizen said. Apparently, a lot of Cubans begin their crypto journey on the TRON ecosystem, thus the premium.
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As of press time, Bitcoin (BTC) trades at $46,797 with sideways movement in the past 24 hours.
