The Cuban Government’s Determination for a Cash-Free Society

Vendedor de frutas, vegetales y granos en Cuba. Foto: cubanencuentro

Business owner in Cuba: “We understand that there really is a crisis in the country and that a digital payment system is needed, but it’s the company’s money.”

By Cubaencuentro

HAVANA TIMES – When the Cuban Government announced in early August that it was taking a leap towards electronic payment systems and a “cash-free” society, red flags began to appear for emerging small businesses on the Caribbean Island, Reuters news agency reports.

The most alarming thing for many budding business owners was the 5000-peso maximum daily withdrawal limit, approximately 20 USD, for businesses, a measure that the Government said was intended to steer Cubans towards digital transactions, by bank transfer, online payments and using bank cards.

These changes were necessary to stop cash shortages, officials at the Cuban Central Bank said, while the rapid drop in the peso’s value and prices increasing also contributed to draining bank reserves and ATMs.

“The demand for cash vs. deposits in cash is growing, and it doesn’t support the work of bank branches,” Alberto Quiñones, vice-president of the Cuban Central Bank said in a TV appearance.

Even so, changes have been a hard pill for Cubans to swallow, says Yulieta Hernandez, the founder and manager of “Pilares Construccion”, a private company located in Havana that currently employs 60 people.

“We understand that there really is a crisis in the country and that a digital payment system is needed, but it’s the company’s money,” Hernandez said when pointing out that her business had already switched to the digital payment ssystem, even though she often needs cash to pay for emergencies at work.

Even before these new restrictions, Cuban business owners were facing what might seem unsurmountable obstacles, such as blackouts and Internet cuts, fuel shortages and no legal way to change large sums of local currency into USD, which are needed to import merchandise from abroad.

She says that three days after the rules were implemented came the bad news: many suppliers began to announce that they weren’t accepting bank transfers, only cash from now on because they were afraid they’d lose access to the paper cash they needed to operate, the exact opposite of what the law wants to do.

This has put companies like Pilares Construccion in a tough spot. The company needs cash to operate, but it is forbidden from withdrawing enough cash from its local accounts.

“Right now, the effect has been paralysing,” Hernandez said, who pointed out that many business owners were already freezing investments amidst growing uncertainty.

“People are waiting to see how (the law) will be implemented,” she added.

Business owners that spoke to Reuters said that measures could dampen their enthusiasm to invest in private companies that sell food, repair cars, build houses and offer a range of goods and services that state-led companies have lost heart for.

Cuban officials are now fighting to start implementing these changes which – according to them – will be implemented over a six-month period.

In Santiago de Cuba, approximately 900 km east of Havana, the Cuban Government has called on experts this week to take to the streets and train people on the basic concepts of payments using a cellphone.

Private enterprise in Cuba, beyond renting out rooms to tourists or some small-scale services, made a comeback in 2021, after decades of being prohibited and eliminated by the late former president Fidel Castro. Ever since then, the Cuban Government has given a green light for the creation of thousands of small businesses.

This represented a great cultural shift for many Cubans born after Castro’s Revolution in 1959, Leonardo Rodriguez says, who runs Kaibocu, a company based in Havana that is dedicated to selling processed foods and agricultural products.

Rodriguez said that him and other business owners had begun to use digital payment systems before the new measures were announced to meet fiscal regulations that had evolved with the growing private sector.

“(Cubans) have been doing business on the street for many years, without ever knowing what a tax system is,” Rodriguez said in an interview with Reuters in Havana.

“We aren’t used to a tax system, to declaring sales, to declaring revenue. Cubans aren’t prepared (…) these are very new concepts,” he added.

Ronald Venero, a 34-year-old fruit and vegetable seller, said that the majority of farmers that sell goods aren’t accepting payments via digital devices.

“Farmers negotiate their produce in cash. If you tell them you’re going to pay by card or by bank transfer, they say no,” he pointed out on a main street in Havana.

Read more from Cuba here on Havana Times

6 thoughts on “The Cuban Government’s Determination for a Cash-Free Society

  • Canadian tourists are so done with Cuba. Everything is a hassle. Shortages, lousy food. We don’t want to experience what Cubans go through every day when we go on vacation. From the rip-off official exchange rate to the tourist exit tax (cash only, gracias), we’re done. There are plenty of other places in the Caribbean.

  • When gov controls $ it is a very bad idea
    I had my bank account frozen and 3 credit cards canceled my job lost because I was a convoy organizer in Toronto ont . This was done to to try and stop people who wanted better treatment of homeless and disabled people as well as some who did not like the Covid vaccine or the restrictions. The ability to use cash is very important. Cuban gov will reduce remittance from the U S with this policy.

  • This reminds me the stories about Angel Castro’s ranch the Patriarch from the Castro’s family. According to the people that used to work for him he didn’t pay his workers with real money but a voucher to buy in the stores inside his agricultural “cooperative” Ranch.
    The Apple doesn’t fall far from the tree

  • Maybe electronic payments is a solution to many businesss situations however the Cuban government’s intentions are more politically minded.
    The government wants most employees salaries paid to MLC bank cards this forcing people to use the card as the only source to buy anything because cash withdrawals can NOT be conducted using the MLC cards in ATM’s. This is financial tyranny.
    Now casa particular’s also will get the same treatment forcing the Cuban banks exchange rates on foreign currency. All booking companies like and ARBNB must be transacted via Cuban banking system with the Casa Particulars trapped into receiving their income applied to their MLC and no cash and having to pay 15% commission on total income!
    Loopholes always start to rear their ugly heads as with the financial services offered by street business who will buy your MLC bank credit for 20-30% commission in exchange for cash. These are just a few examples. The government wants to eliminate cash but at what price to private citizens and businesses acting in good faith?
    Yes, the system being designed is tailor made to suppress humans rights. I expect bully sticks to come down on farmers as well.
    Terrible ideology and disgusting antics in a country where poverty has sky rocketed and huge miss-management of food products exists . Inflation at an all time alarming rate as families struggling to feed their children scrape by, people sleeping in stairwells, and a new society witnessing a two tier system: rich and the poor! what ever happening to the RED partiy’s egalitarian ideals! set down by Fidel?
    There is little evidence of one ounce of compassion by the new regime.
    A cashless society is a myth. Cash always exists just like bartering for goods with no cash exchange.
    So very sad to see such a dispicable government with its self-obsessed goals at any cost to humanity and constant abuse to serve and protect its public!

  • What seems to be ignored in all this, is that a digital cashless economy only hands national governments immense more power and control over their own citizens, and also foreigners. They can track every transaction, and cut access to people’s money in a second, by a push of a button, rendering them completely economically starved, unable to buy or sell, or travel, and so they basically become completely destitute. Look at what happened in Canada, during the Trucker’s Protest of early 2022; many of them had their bank accounts and credit cards frozen, and though they were guilty of no actual crime, they had no access whatsoever to their own money. Now, if that can happen in a modern G7 “liberal” democracy, just imagine what authoritarian regimes such as Cuba, Russia, Venezuela, Nicaragua, and others will do with that kind of total economic control. Time will inevitably prove that a cashless society will be a slave society.

  • Well Mr. Canel Diaz, say goodbye to American tourists. We can’t use our bank cards in Cuba. But you will have total control of the people. Pat yourself on the back and keep building hotels that will remain empty!

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