Cryptocurrencies in Cuba, the Path Entrepreneurs are taking to Avoid the Blockade
For many world citizens, accessing Visa or MasterCard credit and/or debit cards or even payment systems, such as PayPal or Stripe may be something very common. Not for Cubans. Prevented from accessing the traditional global financial system due to restrictions from the United States Embargo, Cuban entrepreneurs have found in cryptocurrencies a route to financial independence.
One of the most interesting projects on cryptocurrencies in Cuba is CubaxChange, a person-to-person (P2P) platform that enables the purchase and sale of crypto assets among its users and also offers a series of services that include mobile recharging and even the sale of virtual cards. PanamericanWorld spoke with two of the entrepreneurs behind this new project: Félix Ulloa Peña, the main developer of the platform, and Isabella Soto Roque, who manages the economic part.
ARE YOU CRAZY? SELLING CRYPTOCURRENCIES IN CUBA?
Four years ago, when Felix Ulloa decided to venture into the purchase and sale of Bitcoins in Cuba, many thought that he was crazy and that he would totally fail. The world of cryptocurrencies was very foreign to Cubans, but Felix wanted to give it a try.
His approach to the world of cryptocurrencies had started much earlier when he was only a freshman in college. But it was a hard blow that put him on the path of this type of undertaking. His mother fell ill and the family was forced to find an alternative way of generating income to survive.
“I was in a quandary: I would either have to abandon college or take advantage of the knowledge I had gained to develop a computer profile that would allow me to make money from home, since I had to take care of my mother. I discovered that I had skills that could help me make money online. I created a YouTube channel where many of my subscribers needed to make online payments with Visa and MasterCards. I also had to face that particular issue”, Felix told us.
“That is when I understood that by using cryptocurrencies in Cuba, we could have access to a number of possibilities over the Internet. In 2016, the idea of selling Bitcoins dawned on me. When you are one of those who dare to start a market, most people wonder if you are insane because, let’s face it, who was going to buy Bitcoins in Cuba? But I was sure there was a future doing this. So, I spoke to a friend from the United States who gave me $100 in Bitcoins. I put them up for sale on my YouTube channel and, within a few hours, I had already sold them all”, he recalled.
This ended up convincing Felix of the existence of a market in Cuba for this product. The next step was to create his first platform. He called it CubaCoin, “where I was selling bitcoins and then went on to sell 10 cryptocurrencies. At the time we got them from CoinBase”, he assured.
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CubaxChange, a platform to buy, sell and exchange cryptocurrencies in Cuba
In April of this year, Félix was one of the promoters of CubaxChange, a peer-to-peer platform where Cubans can carry out transactions using cryptocurrencies.
“CubaxChange came up with the idea of unifying all the people who were selling cryptocurrencies in Cuba. At one point I realized there were a lot of independent sellers, trading at different prices. I wanted to create a platform where everyone could come together and sell directly. This would prevent buyers from having to scout around for offers on Telegram, WhatsApp or Facebook groups, allow them to acquire the cryptocurrencies they wanted, and choose among the sellers that offered more affordable prices, all on one platform, “said Félix.
“The site tries to offer an international focus, so that Cubans can interact with a community that has more experience in these matters, and they can buy and sell among Cubans and people from various countries,” he added.
According to Isabella Soto, at CubaxChange, “sellers and buyers can place their bids. We offer security to users, since we function as transaction intermediaries”, she explained. When a person purchases a certain amount of cryptocurrencies that were in the possession of another user, these crypto assets are retained by CubaxChange in a process known as “security deposit.” Once the buyer has made the payment and this is verified, the platform then releases the cryptocurrencies. In this way, the two parties involved are protected against fraud. For this role, CubaxChange charges a percentage and this is the current business model of CubaxChange.
The list of services has been expanding and they currently offer cell phone recharge, massive dispatch of SMS and the sale of Visa and MasterCard virtual cards. In four months, “CubaxChange” has grown at an accelerated rate. We already have almost 5000 users. We have seen how the number of sellers and buyers of cryptocurrencies entering the site and placing their offers has increased. Competition among themselves has also caused the price of cryptocurrencies to drop, ”explains Isabella.
Cryptocurrencies have opened up a number of possibilities for Cubans. One of its advantages is anonymity, which helps Cubans dispatch and receive money from anywhere in the world.
Isabella Soto Roque
Why are cryptocurrencies so attractive in Cuba? we asked Isabella. “They have opened up a number of possibilities for Cubans. One of its advantages is anonymity, which helps Cubans dispatch and receive money from anywhere in the world. This helps us avoid the restrictions placed by the Blocklade”, she explained.
In addition, Isabella confesses that more and more Cubans are trading in cryptocurrencies, that is, they buy them at a price and sell them at a higher price, which is why it has become a way to generate income. From the CubaxChange platforms, Cubans can obtain, via payments in cryptocurrencies, virtual Visa and MasterCards.
FUTURE PROJECTIONS FOR CUBAxCHANGE
Currently, cryptocurrencies in Cuba are accepted in various businesses. For example, the burger bar with delivery service called “Burger Like” in Santiago de Cuba, receives payments in Bitcoins, Ethereum, Dash, Doge, among others; meanwhile, “Millenium”, a startup that offers mobile and printing solutions, also accepts payments in crypto assets.
Felix assured us that CubaxChange will continue to innovate, “since it is a business that can scale up. The projection is to keep developing new services and grow when setting up a definitive exchange so that users can maintain their exchanges through the site and we can incorporate Cubans into the international world, which is something that is very problematic for us today”.
For CubaxChange to grow, Félix was unequivocal as to what they needed: “it is essential for us to legalize our business in the country. We would like to pay taxes and give the government the possibility of relying on a platform like ours to develop the country, since cryptocurrencies offer many advantages for Cubans. By legalizing our business, we could work with Cuban bank accounts and make transfers through Transfermovil and EnZona directly with the APIs offered by these platforms”.
“We would like to think that the country is going to create laws that allow us to stand firm here, which would allow us to provide a bit more help than what we have already provided to the entire Cuban cryptocurrency community”, concluded Felix.
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