HAVANA TIMES – Cubans are looking for new alternatives so that remittances can continue to flow from the US to Cuba via cryptocurrencies or debit cards, after Western Union closed its offices on Monday. This has been one of the hardest blows for families on both sides of the Florida Strait, reported Reuters.
In late October, US president Donald Trump announced that remittances could no longer be sent to Cuba via the world’s #1 money transfer company if it continued to work through a Cuban military owned company. The decision suspended transactions of the US company to the island.
Cuban finance company FINCIMEX, which belongs to the military, has been Western Union’s main business partner in Cuba for over 20 years. Millions of Cubans in the US and other parts of the world have used Western Union to provide financial aid to their families.
“Using bitcoin to send money from one place to another is the solution because you don’t need a bank. It’s a decentralized economy (…) it’s super-fast and there isn’t any commission,” said Erich Garcia, a 34-year-old YouTuber who is pushing for cryptocurrency transfers to Cuba.
Remittances are one of Cuba’s greatest sources of dollars, after service exports and tourism. The economy is already suffering severe shortages of food, medicines, and other essentials. A contributing factor is the effect of the six-decade US trade embargo on the island.
WU was channeling an average of US $2.4 million a day to Cuban families
Western Union said it sent $2.4 million USD daily to Cuba totaling between “900 million-1.5 billion USD” per year. According to the US-Cuba Trade and Economic Council, remittances in 2019 figured at around 5.3 billion USD.
“Transactions are becoming more expensive (…) and slower, but they are being completed. Now, cryptocurrencies are being used (…), the variants are unimaginable,” economist Omar Everleny told Reuters. He mentioned the “mules”, an informal channel for people who collect cash money and distribute it on the island.
Another option is VaCuba, a company based in Florida with no legal relation to state-led companies that process remittances. They can top up debit cards issued by Cuban banks used for shopping at the state’s dollar only stores. This is part of a government strategy to inject dollars into the national economy.
Trump’s Government has taken more drastic measures against Cuba that contrast significantly with his Democrat predecessor Barack Obama’s flexible strategy. However, the new president-elect, Joe Biden, said in his campaign that he would reverse these policies.