Cuba might be the newest country to accept cryptocurrency to avoid U.S Sanctions, Reuters reported linking to a government source on July 3.
Miguel Diaz-Canel, Cuba's president lately went on the television to address the public. He said that the government is studying the usage of cryptocurrencies, and their primary purpose is to raise capital for almost one-quarter of the population and help to pay the market reforms.
Lately, Cuba is under a cumulative effect from the emergency in Venezuela, which was earlier a primary source of help. It also faces other issues such as a decrease in the rate of transport and an ever-long U.S ban.
Their main purpose is to enhance the growth of national production and demand. The U.S Sanctions directly focus on the tourism and foreign investment sector in Cuba. Therefore, Cuba's government authorities are looking forward to using cryptocurrencies for national and international payments.
Gil Fernandez, Cuba's Economy Minister, said, "We are studying the potential use of cryptocurrency... in our national and international commercial transactions, and we are working on that together with academics."
The new package of plans also expects to boost pensions and wages for workers in the public administration, social services, and state-run media. The anticipated increase would be around 50%, increasing their wage twice almost from $25 to $44.5.
But, the majority of Cubans believe that it will not be able to fill the gap between their salaries and the cost of living. Even though it will increase the purchasing power of citizens. For instance, for a general practitioner, average monthly wages will increase from $40/ month to $64/ month.
Definitely, this is low when compared with developed country monthly wages; however, one of the Cuban economists’ states that this raise is essential as workers lack motivation and are leaving the country. He said:
"For the first time, (the government) is linking the fact that everything can be achieved if workers are motivated."
Before one year, Venezuela launched its own state-run cryptocurrency known as Petro. This was aimed to avoid sanctions; hence, it has remained limited due to the lack of international interest.
It is still now known whether Cuba is looking forward to developing its own cryptocurrency or planning to use an existing one, like Bitcoin(BTC) or Ethereum(ETH).
Gil Fernandez believes that the crypto-sponsored changes are much required and would enable us to introduce decentralization in the economy which entirely runs as per Soviet rules.
Also, the Cuba government is aiming to expand its system, which would enable some firms to keep a percentage of hard currency they obtain to reinvest it immediately.