Some Cubans protesting their government are turning to cryptocurrencies to get donations to people who need them.
Residents in Cuba began protesting the government earlier this month, pointing to an economic embargo on the country and the rapidly worsening COVID-19 crisis. Cases nearly doubled on July 9, with positive results hitting 6,422 after only 3,664 the day before. Matanzas, the most affected province, registered half of the cases.
On Twitter, hashtags #SOSCuba and #SOSMatanzas became trending topics in different parts of the world.
Seeing what was happening in Matanzas, local entrepreneur Thais Liset started to think of ideas to aid her compatriots in that province and decided that donations would be the best option to help address the lack of medical supplies and food.
Along with Cuban YouTuber Frank el Makina, Liset sought help from Erich García Cruz, one of the top Cuban crypto influencers who leads projects such as BitRemesas and QvaPay, two ventures focused on facilitating the inflow of remittances and the collection in dollars by Cubans using cryptocurrencies.
Following the request, Garcia Cruz created a temporary account within QvaPay to receive donations without any commission.
“All transactions are public so that everything that is happening in real time can be audited,” he told CoinDesk.
The cryptocurrency initiative seeks to receive money from Cubans abroad. Crypto provides the easiest and fastest way for individuals to donate, said García Cruz, who added that Cubans in Cuba were the ones who contributed the most. The initiative also allowed fiat transactions from Cubans in Cuba, although the number of cryptocurrency remittances was higher, he said.
Many Cubans living abroad didn’t have accounts at crypto exchanges, García Cruz said.
“They are friends who live abroad and do not know much about how to operate cryptocurrencies, so we guide them step by step on how to buy in Binance or Coinbase,” García Cruz said.
According to García Cruz, transfers in dollars are prohibited as an embargo imposed by the Office of Foreign Assets Control in the U.S. punishes banks that carry out those operations.
However, he said some European banks aren’t covered by the ban, and private remittance agencies such as VaCuba and FonMoney were set up to circumvent the U.S. sanctions.
FonMoney, for instance, receives transfers from euros, pounds sterling, Mexican pesos, Chilean pesos and Swiss francs. It then offers conversion to Cuban pesos or U.S. dollars and remittances to accounts in Cuba or prepaid cards, according to its website.
Cubans have no access to Visa or Mastercard products because of the U.S. trade embargo, while Western Union, the world’s largest money transfer service, suspended U.S. dollar transfers to Cuba in November following the latest sanction from the Trump administration.
Additionally, a drop in the tourism industry caused by the pandemic affected those Cubans who had income in dollars on the island.
In June, Cuba announced it would temporarily stop accepting cash bank deposits in dollars, arguing that U.S. sanctions restrict its ability to use that currency abroad. Bank transfers would continue to be available, the government said.
According to García Cruz, $2,000 has been raised so far, and crypto donations mainly help Cubans who don’t receive assistance from relatives abroad.
Another crypto company that has joined the donation initiative is Slyk.
“It can be used in Cuba by people who want to collect donations with any payment methods from Venmo to bitcoin,” Tim Parsa, the CEO of Slyk, told CoinDesk.
Donations will be used to purchase medicine and masks to help Cuban people in Matanzas and other cities.
Slyk’s community manager and representative in Cuba is Camilo Noa, one of the ideologues behind the crypto donations.
“So far we have purchased medicines, masks, alcohol, hand gel, chlorine, food, personal hygiene, clothing and other supplies. Donations have been delivered to people, hospitals and isolation centers,” he told CoinDesk.
According to García Cruz, no system or institution is overseeing the deliveries.
“It is about Cubans helping Cubans, being supportive and transparent with those who need it most,” he said.
Liset provides updates on her Twitter account on the quantities purchased, prices and the people to whom crypto donations are provided.
After the government began arresting protestors, donations to Matanzas were put on hold, as people don’t want to leave their houses, Liset said.
“Everything was going well. With special permits, we ourselves were sending medicines, medical supplies, food,” she said.
Donations are currently earmarked for health personnel and patients of the so-called “Covid-19 Red Zone” in Matanzas. However, that could change in the future, as García Cruz has not stopped receiving requests from different provinces in the last few days.
The Council for Democratic Transition in Cuba, recently created by opponents to the regime, issued a humanitarian crisis statement characterizing the health situation in Matanzas as “chaotic” on Saturday.
“The chaos is total,” García Cruz said.
According to the local opposition media outlet 14ymedio, dozens of complaints were made about the collapse of the healthcare system, deaths of patients in their homes, a lack of medicine and medical supplies, and poor medical care.
As a response to the role of social media in the protests, the regime started cutting off internet service.
NetBlocks, a global internet monitor, posted on its Twitter that social media and messaging platforms have been restricted since Monday on state-run internet provider Etecsa.
Cuban sources confirmed to CoinDesk that there are internet outages. In some cases, the sources took up to a day to respond to Telegram messages.
In this context, cryptocurrency transactions are also “considerably affected,” Noa said.
As seen in the public registry of QvaPay, no new donations have been registered in the last two days. According to García Cruz, this is happening because of the internet outages and many people have not even been able to use their wallets. “To that we have to add that there is a lot of political fear,” he said.
Outside the system
According to García Cruz, the most common cryptocurrencies used for donations are bitcoin and USDT, although the platform also accepts litecoin, tron and bitcoin cash, among others.
Once donations in crypto are received, they are exchanged on the black market to fiat then used in the MLC stores — Spanish acronym for convertible free currency — where products can be purchased with foreign currency, García Cruz added.
After generating the anger of part of the population, several of these stores were looted recently.
In the last year, the number of MLC stores has multiplied in the country and concentrated the majority of food and basic goods. However, the majority of Cubans do not have access because they do not receive their salaries in dollars or euros.
On January 1, Cuba ended its dual currency system by eliminating the Convertible Peso (tied to the U.S. dollar) and leaving the Cuban Peso in circulation, strongly devaluing the Cuban Peso, which now trades at $0.042.
However, García Cruz said that the exchange rate on the black market is higher, of 60 Cuban Pesos per dollar, while cryptocurrencies are exchanged at 50 Cuban Pesos due to a supply and demand factor.
Noa said that most Cubans do not understand the use of cryptocurrencies and those seeking help prioritize getting cash to buy food and medicine they need. García Cruz, however, estimates that there is a big crypto community of about 200,000 people in Cuba.
UPDATE (July 16, 2021, 02:43 UTC): Updated to clarify that the crypto donations aren’t specifically funding protestors.
First published on: Coindesk