For the first time in Cuban history, the US dollar (USD) has lost value to Bitcoin, which exists exclusively on the internet without the support of an army. The cryptocurrency has been trading at a premium to the US dollar in cash.
The historic shift in currency values extends to the main cryptocurrencies, Bitcoin, Ethereum, and stablecoin Tether, a digital currency pegged to the US dollar, as reported by Alex Gladstein, Chief Strategy Officer for the Human Rights Foundation, and Enrique Yecier, a Cuban citizen, via their Twitter accounts.
Due to political tensions between the United States and Cuba, the island has been shut off from the world financial system and its payment railroads. Simultaneously, the North American country has had one of the largest migrations of Cuban people.
This has resulted in a situation in which many Cubans rely on remittances sent by their families overseas, but the national mechanisms for receiving or sending a US dollar transaction always have an impact on the individual. As a result, crypto payments with Bitcoin and other coins are possible without the involvement of a third party and are more efficient in terms of fees and time.
Furthermore, Cubans employ digital assets to shield themselves from inflation and currency depreciation. As a result, local reports indicate that companies and merchants have begun to accept Bitcoin and other cryptocurrencies as payment methods.
Enrique Yecier, the Cuban citizen who made the viral report about the value of Bitcoin surpassing the US dollar on the island, asserted the following about 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.
Cuba appears to be gradually but steadily increasing its Bitcoin and cryptocurrency acceptance. According to AFP, the national government awarded merchants a license to operate digital assets in August.
According to the report provided by the Central Bank of Cuba, the measures come within rule 215. The new guidelines, which have been in effect since September 15th, aim to govern the usage of cryptocurrencies in business transactions.
Cuba will recognize and regulate crypto for payments on the island https://t.co/nwZRGaB3rZ
— Bloomberg (@business) August 27, 2021
According to Chainalysis’ 2021 research, the country is still distant from having a relevant position in terms of adoption. The top ten countries with the most Bitcoin and cryptocurrency adoption all have one thing in common: most are dealing with a high inflationary economy or a military war, like Argentina, Ukraine, Venezuela, Afghanistan, and others indicate.
Bitcoin, according to Yecer, is not the most valuable digital asset on the tropical island. This position belongs to TRX (about $0,081162), which can sell for as much as 8 CUP per token, whereas a reasonable price should be around 6.15 CUP, according to the Cuban citizen. As a result of the premium, it appears that many Cubans begin their crypto trip on the TRON environment.
Bitcoin (BTC) was trading at $46,797 as press time, with a sideways change in the previous 24 hours.