The Truth Behind Cuba’s Bitcoin Revolution: An on-the-ground report
From addressing runaway inflation to providing a secure way to save money, Bitcoin can be a critical economic tool for Cubans.
by Joseph Hall 10 min October 4, 2023
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In Cuba’s capital, Havana, a Bitcoin community has emerged from an economically antagonistic environment.
“Satoshi didn’t create Bitcoin for Cubans, but it really comes in handy for us,” Forte, co-founder of the aptly named local Bitcoin organization Cuba Bitcoin, tells Magazine.
Cubans are turning to Bitcoin because their money is increasingly worthless. Zimbabwe, Venezuela and Lebanon often compete for media coverage about runaway inflation levels, but the Cuban peso is not far behind.
The Cuban peso has devalued so much over the last few years that carrying bags of cash is increasingly common among the rich and the poor.
In practice, even if someone bought Bitcoin at the top of the 2021 bull run at $69,000, their money is worth much less in Cuban pesos. Whereas Bitcoin dropped 80% to its bear market low, it has since recovered 100%, and the peso has devalued by 90%.
The realization that someone should swap local currency for the Bitcoin top, knowing that it will crash and they’ll still retain more purchasing power, is one of the many financial wake-up calls received while working on Cointelegraph’s new documentary, The Truth Behind Cuba’s Bitcoin Revolution.
In 2021, I came across the article “Inside Cuba’s Bitcoin Revolution” by Human Rights Foundation chief strategy officer Alex Gladstein, in which he explains how and why Cubans were utilizing Bitcoin’s stateless and low-fee properties to save money and escape financial oppression.
In line with the Bitcoin mantra of Don’t trust, Verify, I went to see with my own eyes what Gladstein described.
Camera in hand with my trusty travel partner Paco de la India by my side, I network my way into the Cuba Bitcoin community, which now counts thousands of enthusiasts and advocates.
La Cultura Cubana
Following one of the largest financial conferences in the world, Bitcoin Miami, in arguably the world’s most capitalist arena, the United States of America, I hop across the Caribbean to Cuba, one of the few extant socialist states. The contrast hits me harder than the Cuban tropical heat.
From the moment I landed at Havana Jose Marti International Airport, I noticed some funny quirks: doors open manually (forget automatic sensors), check-in and immigration are done on pen and paper, and the taxis are 1950s Chevrolets.
It’s common to describe visiting Cuba as a time warp. It’s not hyperbole; Cuba cannot access world markets, financial institutions or trade. The United States has subjected Cuba to a trade embargo — the longest in modern history — since the island nation nationalized U.S. oil refineries in 1960.
As a result, Cuban industry, economic output and commerce lag far behind the modern world.
The embargo, coupled with more than half a century of communism, has resulted in a highly educated, extraordinarily literate but desperately poor and hungry population, many of whom possess a heartbreaking desire to leave the island, or in Spanish, to find a “salida” — an exit.
Why stay in a country where a taxi driver earns more than an atomic engineer — and the emaciated engineer struggles to feed their family?
Adopting Bitcoin
In such an environment, it’s a wonder why Cubas don’t flock to Bitcoin as money that exists outside of state control. However, many Cubans are learning about and slowly turning to Bitcoin.
Catrya, one of the main characters in Cointelegraph’s new documentary and one of the founders of Cuba Bitcoin, explains that there could be around 5,000 Bitcoiners in Cuba, and if you include crypto enthusiasts generally, the number is higher still.
Cubans do not have easy on-ramps into crypto. Firstly, those with internet connections cannot sign up for Binance, Coinbase or Gemini due to their nationality. For Cuban Americans on the island, Cuba’s government restricts access to American websites. Cubans buy Bitcoin peer-to-peer through Telegram or WhatsApp groups and at in-person meetups.
What amazes me is the tiny amounts of money Cubans put aside to save money or “stack sats.” Saving 1,000 satoshis (less than $1 a week) is meaningful to a Cuban on $40 monthly. The Cuban peso may not be here in 10 years, but Bitcoin certainly will be.
The peer-to-peer process is straightforward, but it’s not beginner-friendly, and these hurdles can hamper adoption — although they do have a silver lining, as Catrya explains:
“Since we’re denied [access to exchanges] by default for being Cuban, we can never do KYC [Know Your Customer], so that’s a good thing for us, at least in terms of privacy.”
Buying Bitcoin peer-to-peer and storing Bitcoin by taking ownership of the private keys is safer. Customers who trusted custodians such as FTX, BlockFi, Celsius and Vauld with their crypto were wiped out. Cubans don’t have that option, and while it takes longer, it’s more secure.
Erich Garcia Cruz, the founder of QvaPay and BitRemesas — a currency remitter using Bitcoin that boasts tens of thousands of Cuban users — says that the small but growing number of Bitcoin customers somewhat represents Cuba’s fledgling internet culture.
Connectivity and freedom of information
Cubans could get online in earnest from 2013. So, while the rest of the world was enjoying the iPhone 5C and 4G, a few lucky Cubans fortunate to access a computer could get online that year, albeit with an awful internet connection.
Now, Cubans can access 3G and sometimes 4G connectivity on their phones. The tech-savvy and younger Cubans use VPNs to circumnavigate online restrictions.
Generally, the lag in internet infrastructure combined with the cost and difficulty of buying a smartphone on a frighteningly low salary means Cuba is way behind in IT.
In 2021, the World Bank reported that three-quarters of Cuba has access to the internet. But while the issue is improving, internet censorship is rife, and Cubans are repeatedly told to trust the government through state-sponsored TV, newspapers and media.
Independent media publications are classified as “enemy propaganda,” which is something I was made aware of a few times during my investigation. I won’t share those stories here, but it’s safe to say reciting such stories would’ve landed me in trouble had I stayed in Cuba.
Two exiled Cuban journalists have since advised me to avoid returning to the island for some time, especially if the Cointelegraph documentary gets a lot of attention.
A funny caveat to the state-run media is that some Cubans were orange-pilled by Bitcoin proponent Max Keiser. His appearances on the Russia Today news channel were approved for broadcast in Cuba. Some of Catrya’s peers watched the show where Keiser bashes fiat currencies and promotes Bitcoin.
And yet, Bitcoin is magic internet money; it lives on the web. If Cubans aren’t online — or watching Russia Today — how can they know about it?
Orange pill Cuba
Bitalion, one of the Cuba Bitcoin founders, works in telecommunications for the government. He explains that as a privileged public sector worker, he benefits from better internet connection speeds and lower online censorship levels.
Bitalion stumbled across the Bitcoin white paper in 2014 and became infatuated with the idea of an independent, borderless currency. He rhetorically poses the question: For those fortunate Cubans who are able to travel abroad, what can they bring to the new country? The peso in their pocket, or Bitcoin in a mobile wallet?
As with the other Bitcoin advocates on the island, Bitalion volunteers his time to educate people and support Bitcoin adoption. He’s also one of the handful of Cubans running a Bitcoin node. At Cuba’s first-ever Bitcoin-only meetup, he demonstrates to dozens of Cubans how to pay for goods and services directly to his Lightning Network node.
Cruz, Forte and countless business owners explain that Bitcoin is an easy “orange pill” to swallow, particularly for the digitally capable Cubans. You merely explain to them that nobody controls it; it’s stateless money.
At face value, Bitcoin is a useful tool for a country that has been financially and economically handicapped for generations. But for Forte, Catrya and Bitalion, the ideology of Bitcoin resonates strongly.
Forte jokes, “Satoshi didn’t create Bitcoin for Cubans, but it really comes in handy for us.”
In the hope of encouraging more Cubans to explore Bitcoin, the trio and the Cuba Bitcoin community host monthly educational meetups in which they explain the principles of Bitcoin and delve into its philosophy.
They recently introduced the popular Mi Primer Bitcoin (My First Bitcoin) program in the country, which is already picking up speed in El Salvador and will soon be instructed in schools nationwide.
Por qué aceptas Bitcoin? Why do you accept Bitcoin?
QvaPay’s Cruz explains that Bitcoin is the financial tool that allows the small but growing number of Cuban business owners to access foreign products.
Recent U.S. presidential administrations had fluctuating policies on the Cuban embargo, relaxing and tightening different aspects based on political expediency.
Cruz orange-pills suppliers in an attempt to open up the Cuban economy to international markets where possible:
“You are accepting Bitcoin because you’re dealing with a private [independent] coin. The government doesn’t have access to the transactions you and you have the freedom to do whatever you want.”
The term “freedom,” or “libertad,” popped up frequently as I mingled and met with Cuban Bitcoiners, crypto enthusiasts and entrepreneurs. The fact that citizens can hold money in a wallet, outside of government overreach, appealed to many Cubans whom the government has consistently let down.
The ability to store wealth on a mobile phone in a Bitcoin Lightning wallet instead of in pesos at a bank is also an efficiency gain. It means no more queues at banks to cash in money that could devalue by a few pesos over a bank holiday weekend.
Cruz and three other business owners also share that accepting Bitcoin benefits holidaymakers. Adan, a nightclub, bar and restaurant owner, explains that tourists bring a lot of cash to Cuba for vacation — and that’s risky.
Having Bitcoin on a mobile phone in a wallet is a safer way to travel than flashing wads of dollar bills that end up on the black market in Cuba, inadvertently supporting the illicit and sometimes dangerous black market activity of exchanging notes in public.
Adan accepts Bitcoin because of the international branding the Bitcoin logo brings. It opens up his bars’ doors to another potential market. Similar to El Salvador, where Bitcoin tourism has become a trend, bars and restaurants in Cuba could also attract holidaymakers to spend satoshis instead of pesos at the till.
Finally, there are myriad ways in which adopting Bitcoin can lead to positive and unexpected outcomes. Mister Navi’s bar and restaurant, run by Mr. Navi and his son Julian, recently began accepting Bitcoin. Following a conversation with Forte, Catrya and Bitalion, the Cuba Bitcoin group now hosts educational Bitcoin meetups at the venue.
I tipped one of the service staff in Bitcoin at Mr. Navi’s the first day we visited. Five days later, I saw her again when we went out for dinner with Mr. Navi and Julian. She seems different — I ask her if she is OK. She confesses that she was mugged a few days ago, and the attacker stole her purse, cash and phone.
To her surprise, when she downloaded the Bitcoin Lightning app where I’d tipped her, the funds magically reappeared on her new phone. On seeing her wide-eyed reaction, I tipped her again.
It’s clear that, for Cubans, Bitcoin could represent a critical instrument for securing their financial future in the face of runaway inflation and government interference, or as a way of opening up to embargoed markets and the international financial world.
Disclaimer: The views, opinions and perspectives expressed in this article are those of the author and are not necessarily those of Cointelegraph.
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Joseph Hall
Joseph is a research and interview journalist with a keen interest in the monetary policy implications of Bitcoin and cryptocurrencies.
