“I even sold my house”: the opaque multilevel business that Cuba can blow up

The success of an opaque digital assets company has led many to wonder if all of Cuba is not, perhaps, involved in a pyramid scam

Young Ruslan’s story was a success story. In his own words, he had joined Trust Investing (TI) in May 2019 with $ 15, the minimum investment accepted by the company. A year and a half later, Ruslan Concepción claimed to have a daily income of more than $ 100,000. He was a self-made millionaire, an example for thousands of Cubans hit by the economic crisis and the pandemic. Not even the government dared to cough at the recent director of the company, who could roam freely in a confined country. In mid-April, Ruslan Concepción and his family celebrated the success of the leading digital asset firm in the country at the majestic Hotel Nacional in Havana. On the Facebook profile of his brother, Wilhems Concepción, you can still see the photos of those happy days, in which the crypto asset manager grew unstoppably, exceeding 230,000 affiliates within the island. Ruslan and his family had bypassed all restrictions to travel from Las Tunas – his hometown – to Havana and enjoy their vacations at the exclusive hotel. “Most people spend 30 or 40 years of their life working WITHOUT REALLY GETTING ANYTHING. […] #EVOLUCIONA we are passing through this land, do not leave your dreams for later, do it HERE AND NOW”, still says a publication by Ruslan of the last April 10. Two days before he had given an account of the “dreams come true” by various members of the company, who had acquired cars and motorcycles, and the support of two popular Cuban singers who in a promotional video invited “come with us (sic)”. But even the best dreams are over. On April 22, Ruslan was arrested at the airport trying to travel to Russia with his family. This is the story of the man and the opaque company that has led many to wonder if all of Cuba is perhaps not involved in a pyramid scheme.

A story of success?

A week later, when the case was made public, his brothers argued that the accusation pointed to the probable illicit origin of the money he was carrying. Little more. To date, it is not even known with certainty where Ruslan is or under what charges he is being investigated. “The only certain thing is that in his house and in those of several of his friends they made tremendous searches and carried many things. Even his car, which he had left in a friend’s garage, they took away”, says Maikel, also a resident of the city of Las Tunas, who was about to join the company “when this exploded.” “Other people,” Maikel continues, “were not so lucky. Media Tunas has put their money in Trust Investing and it is logical that the town is in turmoil. Those who went to the Government the other day to demand explanations are only a small group compared to the thousands. that right now they don’t know if they lost the investment. ” An article on the subject, published on May 3 by ‘Cubadebate’, the main digital magazine of the Cuban government, surpassed 2,000 comments in a few hours, 10 times more than any of its other most popular articles. “I sold my house and my wife also, I sold a car that belonged to my grandfather and we put everything in ‘trust’ [sic] we are rented with the promise that in 10 months we would have double, and it turns out that now our accounts’ trust ‘They are frozen and we cannot even extract the money,’ lamented one of the readers.

In parallel with the arrest of Ruslan Concepción and several of his collaborators, at the beginning of May Trust Investing decided to intervene all the accounts of Cuban investors, under the pretext of having found “irregularities in balances and other operations.” This situation was not, however, addressed by the company directors during the conference for the second anniversary of the company, on May 9, despite the fact that the island’s ‘trusters’ represent more than a quarter of the total number of its affiliates.

A company in the shadows

“The Cuban State does not promote or approve the operation of this type of ‘companies’. None of them has a license to operate within the national territory, [their] operation is similar to what is known as Multilevel or Pyramid Scams, also called Schemes of Ponzi, [the public is] advised not to engage in operations of this nature. ” On May 13, the Central Bank of Cuba (BCC) issued a statement in which it fixed Havana’s position after two weeks in which the social networks linked to Trust Investing had entered a state of convulsion. But the official statement did not seek to clarify the doubts of the company’s local investors, but rather to respond to the threat made by the TI directive four days earlier: “We make ourselves available to the Cuban authorities in case they need any documentation. But we also warn If something happens to our boys, you are going to have 800,000 people against your Government, “Fabiano Lorite de Lima, the manager of Marketing Director, declared during the anniversary conference.

Clearly, his ultimatum did not sit well in the Palace of the Revolution. Just 24 hours later, the Cuban president, Miguel Díaz-Canel, referred to the matter, assuring that speculation with crypto assets was studied with caution by the country’s leadership (“its procedures could be a motive for fraud,” he went on to affirm), and the Interior Ministry expanded the scope of searches and arrests of company leaders. By Thursday, when the Central Bank released its note, it was decided to put aside the conventions and mention Trust Investing by name, within the list of companies that the authorities consider potentially dangerous. As the days go by, and in the face of the persistent blocking of their accounts, numerous Cuban trusters have begun to wonder if the company actually deceived them. Reasons are not lacking. With a stratospheric profit margin (200% within 10 months) and hardly any data from its board of directors (only the names of its leaders are known, the Brazilians Diego Chaves, Lorite de Lima and Claudio Barbosa, apparently domiciled in Spain ), Trust Investing is a big unknown. Starting with its legal registration, which in the past the company suggested that it could be found in Spain or Panama.

However, in June 2020 both countries explicitly denied having authorized the firm to provide investment, securities brokerage or advisory services. The National Securities Market Commission of Spain included the company in its list of “entities warned”, and the Superintendency of the Stock Market of Panama (SMV) considered it necessary to prevent “the public [since] that the website of the said company reflects physical addresses in Panama City [… and] it is not registered in the Public Registry, and it is not and has not been the holder of a license or registration issued by the SMV “. Since then, Trust Investing would have moved to Estonia, as recorded in several of its promotional videos and the statements of its CEO, Diego Chaves. The “open legal structure of Estonia, one of the most developed countries in Blockchain technology”, is presented as a guarantee of the reliability of Truster Coins, the “digital wallet” that the company intends to incorporate into its business scheme. The registration of companies in the former Soviet republic is a practice that has gained popularity in recent years, this newspaper explained months ago in an article co-authored with LABE Abogados. Using the figure of the “electronic residence”, natural and legal persons from other countries can establish their companies there, without even having to travel to Tallinn. The decision to settle in Estonia would be based on the interest to take advantage of the tax advantages of the local legislation. Or be an attempt to make the company’s fabric more complex, in anticipation of possible conflicts with its investors. In the middle of last year, the forensic financial analysis firm Tulip Research warned that the profits promised by Trust Investing did not correspond to the indices of a profitable company, that it did not have a specific product and that the reference bank that it named as an associate did not exists. Neither on the TI page, nor in its posts and videos, are details given about the ‘trading’ business it claims to do. Nor did the executive director respond when contacted for this report through his Facebook profile.

But Trust Investing continues to advertise so-called personal success stories to announce more ambitious projects. “In 2023 or 2024, when we reach the limit of our affiliates, we will have other products so that we can work,” Chaves anticipated in a recent broadcast. The office, however, did not look like that of a company that handles millions of dollars in competitive investment markets, but rather the living room of a house with little natural light. The newly appointed national director of the company wanted to take the opportunity to meet with his followers in meetings with little or no social distancing. While a few hundred meters from there, the police and health authorities demanded the use of masks and applied heavy fines to those who did not do so, inside the hotel facility the “Trust Investing family” celebrated its success without being disturbed.

Latin America “will be the global ‘hub’ of bitcoin”: Paraguay emulates El Salvador

The country is preparing to debate a legislative initiative to convert it into legal tender.

El Salvador’s decision to accept bitcoin as legal tender has generated a wave of interest in other Latin American countries that see cryptocurrencies as an opportunity to boost their economies and circumvent some of their inefficiencies. Panama, Mexico and especially Paraguay have taken steps towards a generalized adoption of the most operated of cryptocurrencies, with important legislation to provide a new legal framework, which makes analysts think that Latin America could become a world center of reference in cryptocurrencies .

El Salvador overtakes central banks and lights up a financial hub with bitcoin

The South American country is the one that is closest to following in the footsteps of the Nayib Bukele government, as Paraguayan Congressman Carlitos Rejala and Senator Fernando Silva Facetti plan to present a bitcoin bill in Congress on Wednesday, July 14, underlining the urgency of legislators to formulate a coherent digital asset strategy for their country. “I’m here to unite Paraguay,” Rejala tweeted last Friday, adding that he and his fellow legislator are planning a “mega surprise for Paraguay and the world.”

Without elaborating on what the new legislation will entail,

It is believed that, like El Salvador did in June, it will seek to have the creation of Satoshi Nakamoto considered legal tender in the country, which will imply the same advantages that the Central American nation theoretically enjoys. But, in addition, it is speculated that the future regulations will also introduce measures to turn the country into a world center for cryptocurrency investors, businesses based on these digital assets and, most likely, miners, given the low energy prices in Paraguay.

The technology entrepreneurs of the nation go to one when defending the suitability for the nation chaired by Mario Abdo Benítez to become a reference nucleus in blockchain and strategic technology in South America. This was defended last week, during the Talent Land Jalisco 2021 conference, by a group of businessmen from this industry, who closed ranks with the fact that the country has “all the conditions”. As they explained, the largest cryptocurrency in the world could be useful for sending and receiving remittances and for electronic commerce, still underdeveloped in the country, according to their vision.

In addition, the abundant and cheap energy production in this nation works as a magnet for cryptocurrency mining companies – dedicated to the process of obtaining these assets through computational power that consumes large amounts of electricity. Asian companies expelled from their countries by the strict regulations that hang over miners, especially China where these businesses have been banned, are landing in Paraguay where energy consumption is cheap thanks to the number of hydroelectric plants it has as it is the first country in the world in terms of energy availability per capita, as explained by the businessmen meeting in Jalisco last week.

For all the above, Latin American countries have all the numbers of being a global benchmark in ‘cryptos’ due to different factors. In the first place, according to Enrique Palacios Rojo, COO of Onyze, monetarily, “its financial systems are not as powerful as in Europe and the United States, and the banking system of its population is very low, which generates a great opportunity for the world of cryptocurrencies ”; secondly, “being one of the first countries in the world to draw up strict regulations for them allows them to position themselves as benchmarks.”

Finally, adds the expert, “thanks to the energy capacities in many of these countries of the South American and Central American continent, they serve as a claim for a sector such as mining that has been expelled from China due to the prohibitions of the great Asian giant” .

He invested the rent in the stock market and lost it. Now educate Hispanics to win on Wall Street

Yurek Vázquez made his own version of that phrase so common in cowboy and gangster movies: “The bag or the life.” His first experience on the stock market was devastating. He invested the $ 2,000 he had to pay the rent and lost it in a second.

“I knew how to push the button, but I didn’t know what was happening in front of me,” says this Cuban immigrant who has become an expert in the stock market and in business survival.

“I had to call the broker to close the transaction for me. “The number is the amount you won,” he told her. And what I saw was that he had lost everything, ”Vázquez recalls in an interview with the Nuevo Herald.

Vázquez believes that the stock market enjoys a bad reputation precisely because of people who invest without being informed, but investing is still the fastest way to generate wealth. That is why one of his objectives today is to equip Hispanics with the tools offered by the stock market so that their inclusion in the market economy is more effective.

“The stock market is not just for investors. When you normally talk about Wall Street, people think they are being invited to invest, but it is not just that. In the stock market are the answers we need for our small or medium business to succeed or get ahead, in the midst of a crisis such as COVID-19, ”he explains.

Vázquez came to the United States at the age of 14 and dropped out of high school to help his mother. His first job was at an auto repair shop in Hialeah where he arrived at 7 in the morning and didn’t leave until 9 at night. But he was very organized and a good entrepreneur, and he was climbing in Miami. He first founded a business to sell beepers, later an import and export company, and along the way of his career he had to save some other bankrupt company.

So the first misstep of the bag was not going to stop him. What conquered him about this was the potential in the transactions he made from his room in his house, Vázquez said, from his apartment in one of the luxury towers of downtown Miami.

It was precisely the understanding that education is essential to win in the stock market, and that the participation of Hispanics in it is very limited, which led him to found the Wall Street Business Academy, an online academy to teach how to invest in the stock market. stock market and at the same time use it to anticipate trends in the economy.

HISPANS AND THE STOCK EXCHANGE

As for the stock market, only 10 percent of the population in the United States controls 84 percent of wealth, according to Federal Reserve figures.

In the case of Hispanics in the United States, who represent the eighth largest economy in the world, only 30 percent participate in the stock market. This represents a great loss, considering also that in recent times many people have decided to invest the $ 1,200 of the stimulus check in the stock market.

Thus, small investors are believed to have driven the rally in the price of US stocks.

“When you take into account that a Hispanic launches a business and does not have access to the stock market, from the outset they are at a competitive disadvantage with those who are using it,” said Vázquez, indicating that Hispanics lack that free tool offered by the market from both an investment and information perspective.

The expert gives as an example that the behavior of the markets since 2006 began to predict that a contraction was coming. Then the crisis of 2008 occurred, and the businessmen who dominated that information were able to prepare and make more educated decisions to face it.

THE BEST TIME TO INVEST IN THE STOCK EXCHANGE

Vázquez is of the theory that “there is no bad economy because you win when the market falls and when it rises”, that is why this moment is as good as any to start investing.

“In the first quarter of 2020, as the Dow Jones made headlines by plummeting in the face of the pandemic, Goldman Sachs reversed lower and earned $ 8.74 trillion, Citi made $ 1.2 trillion and Bill Ackman $ 2 trillion. With or without chaos, you can win, ”he exemplified.

Vázquez does not believe that there is a disconnect between the behavior of the stock market, which has recovered from almost all the losses suffered during the pandemic, and the economic crisis and unemployment.

In times of crisis, investors often buy government bonds to secure their investment and get some return, he explained. This time the Federal Reserve has had a different attitude and has bought shares of private companies.

“The Federal Reserve, by bailing out these companies, bails out employees, saves jobs, and this has an effect on the economy. So the growth of the stock market has been the reaction to the wise move of the Federal Reserve ”, he emphasized.

WHAT ARE THE BEST COMPANIES TO INVEST

Vázquez recommends diversifying capital, starting small, and generally investing in companies when they are in their early stages, so that the investment is smaller and when growth occurs, thus obtaining a greater return:

▪ the medical marijuana industry, which is still very young and has not yet been exploited.

▪ technology, renewable and alternative energy companies.

▪ companies related to water, land and food.

“90 percent of my investments are buying and selling currencies from other countries and cryptocurrencies, but there is 10 percent that I reserve for these industries in the long term,” he said.

He also pointed out that although many now speak of investing in pharmaceutical companies because of the prominence they have taken, in reality they have established investors.

Vázquez has mixed feelings about investing in real estate, because although the state of the markets and the incentive of low interest rates favor this industry, there are many aspects that could cause a decline.

He points out that never in the history of the world economy has the Gross Domestic Product of countries stopped, and the consequences of this situation are not yet calculated because governments have been proactive and injected capital.

What will happen when the millions who are unemployed cannot pay the mortgage ?, he warns.

Plus, there are 70 million aging baby boomers who own 30 million properties, he says. If your heirs decide to sell them, then there will be a surplus in the market that will add to possible foreclosures. The homes could lose value and whoever buys them to invest would incur a debt that must later be paid, causing loss.

“We must be judicious in what we are seeing in the market. If you are going to live in the house, it is a good idea to buy, but if you buy it as an investment, you must do it in the long term or wait to obtain a better price ”, he concluded.

Cryptocurrencies in Cuba: the digital gold rush

As in the days of the American Old West, a new gold rush passes from person to person in the digital world: the cryptocurrency market.

Although there are no official figures that have counted the followers of this trend, some experts venture to estimate hundreds of thousands of users of “crypto” money in Cuba, especially in the variant of Bitcoin.

Meanwhile, and despite the fact that the use of cryptocurrencies in Cuba is closely associated with investment in the controversial company Trust Investing – to which we will dedicate another installment of this program – they are also increasingly used as a means of payment for services online, remittances or purchases of products online, which Cubans could not access otherwise.

About what cryptocurrencies are and what potentialities they have in Cuba, we spoke with Juan Alejandro Triana, Professor at the Center for Cuban Economic Studies at the University of Havana.

What are cryptocurrencies?

Cryptocurrencies, as the word says, are a currency, money as such, a commodity. They can be considered this way insofar as they are produced by the human being; that is to say, they are the product of human labor, of abstract labor.

It is definitely about money, since they fulfill the three basic functions of this resource: they serve as a means of payment in the world in transactions between people. They also serve as a means of value, because they express the value of certain goods through their price. And in addition to this they also serve as a means of hoarding. There are several people – companies even – who denominate their values ​​in cryptocurrency.

In this case I am talking specifically about the one that is most used internationally, which is Bitcoin, although it is not the only one, there are many cryptocurrencies, some more successful than others. There is Freecoin, Litecoin, Namecoin … that is, there are several types of cryptocurrencies, hundreds of them. However, Bitcoin, created in 2009, 2010, has been the most widely used and most famous cryptocurrency. Even recently, important companies such as Tesla, related to Elon Musk, have invested significant sums of money in Bitcoin and is already allowing its users, and the general public, to pay with it for their products. It is, as I said, a commodity and also a commodity-money.

But how is it created, where does the cryptocurrency come from?

Access to cryptocurrency and the creation of cryptocurrencies, for example, in the case of Bitcoin, is an extremely complex process, not in Cuba, but in the world. Creating Bitcoins, or the Bitcoin mining process, as it is commonly known, is a very complex process that requires technical skills, a fairly high level of education in encryption and the art of cryptography; therefore, creating the cryptocurrency is not a simple process.

In Cuba, people who have funds denominated in hard currencies, legal tender, in different countries, access the purchase of Bitcoin to carry out different transactions. But they can do it with the money in the bank. If the person, inside or outside of Cuba, has an account in an internationally recognized bank, and in so-called hard currencies, he can use the funds he has in those accounts to buy the cryptocurrencies he wants. In the case of Cuba, with MLC cards denominated in dollars or other freely convertible currencies, it must be remembered that these are accounts domiciled in Cuban banks. These financial institutions suffer the stigma of US economic sanctions and are neither recognized nor frowned upon in many financial systems in various countries.

Personally, I do not know Cubans who have bought cryptocurrencies using the accounts they have in national banks. However, I am aware of the trade that exists within the Island for access to cryptocurrencies with Freely Convertible Currency (MLC) cards between individuals.

Is the use of cryptocurrencies legal?

That is one of the questions and also one of the most important barriers that people face when deciding whether or not to use Bitcoin. What’s going on? As I was saying, we can affirm that Bitcoin is money because it fulfills the three fundamental functions of money that I mentioned earlier. As it is not centralized by Central Banks of the countries, Bitcoin lacks legal course and representation in these countries. No country in the world today, to my knowledge, uses Bitcoin for its actual business transactions. What’s going on? That among individuals the use of Bitcoin is allowed.

This resource has important advantages since it reduces transaction costs and times and eliminates the need for financial intermediaries. It is a business relationship, which involves a transaction between two people.

How to explain to people what it is or bring them closer to Bitcoin? Simply guiding them on how it is referenced to the value of this resource in US dollars. That is, today the price on the stock market for one Bitcoin is very high, around 50-55 thousand dollars for 1 Bitcoin in the stock market. Normally people do not own Bitcoins but, when you ask can I pay you in Bitcoin? or how much does it cost me in Bitcoin? what they answer is: 50, 60, 100, 200 dollars in Bitcoin.

For this there are different mechanisms. There are well established and secure payment gateways. There are also special purses or wallets where you can store this type of cryptocurrency to use them when necessary. As several countries have decided to regulate aspects related to Bitcoin, as well as various people or companies use it, it is gaining a little more, let’s say, in seriousness, in recognition.

There is also a kind of rejection by people who do not have extensive knowledge on the subject, because it is a currency that lends itself to so-called “financial scams” ​​and is very volatile. Furthermore, it is an extremely young coin. All this also generates a certain insecurity among people.

What would be the disadvantages of this new form of money?

The main disadvantages that I could see in the use of cryptocurrency is that it needs connectivity. You must necessarily be connected to the internet to be able to use it. As I said before, the high volatility of their price on the stock market also makes people reject them.

Bitcoin is very sensitive to speculation. There are some aspects that consider the value or the growth of the value of Bitcoin from, mainly, speculative processes. This definitely makes people suspicious when it comes to using it. And there is also the fact that the currency does not exist physically; There is no recognized authority that can regulate the movement of this cryptocurrency and this implies a set of disadvantages for its use.

Despite having been in use for 11 years, only in the last five or six years has there been a greater speed in the evolution and use of Bitcoin. It will be necessary to see what is the development of the same in the medium term. Without being a fanatic of cryptocurrencies, I do believe that they are a form of money, a commodity-money that is going to be used more and more frequently. When governments decide to regulate its use more widely, it will be given greater credibility with the general public.

How is the use of cryptocurrencies in Cuba?

Definitely the case of Cuba is extremely particular. Cryptocurrencies were not only used in so-called developed countries, although there is a fairly widespread use in these types of countries. Even the so-called underdeveloped countries have seen them as a mechanism to access certain funds for different purposes, in a more secure and faster way.

In the particular case of Cuba, the fact that we are a country blocked by the United States hinders all kinds of trade between Cuba and the rest of the world. To date, the Cuban government has not yet regulated anything regarding the use of cryptocurrencies.

Others like Venezuela have regulated them and even promoted their use. Countries such as Russia and the United States, or many of the European Union, have begun to regulate not only the use of cryptocurrencies, but also some aspects related to them, such as the generation of profits, wealth and the payment of taxes on that wealth, which comes from using cryptocurrency trading.

In Cuba that does not yet exist. However, the cryptocurrency has already arrived and it is not something recent. There are no official figures in this regard, but some experts establish that there are more than 50 thousand cryptocurrency users in the country, others maintain that there would be more than 80 and up to 100 thousand cryptocurrency users in Cuba. In reality, there are no official records and I personally do not know an exact way to capture that data. But I do believe that there is a fairly widespread use, especially in city centers. Even if the use of cryptocurrency is not regulated in the country – it is not regulated in the United States, for example – individuals do use them for their transactions and for certain commercial relationships. It is not only used for the exchange of goods as such, that is, for the sale of some type of product and its payment in Bitcoin, but it is also used to send remittances from abroad to Cuba and to send money from Cuba to abroad.

This is a double-edged sword, because although it is not regulated or transparent by any institution, it means an advantage over the more than 200 regulations or sanctions imposed by the Donald Trump administration on Cuba in the last 4 years, which include restrictions on shipping. of remittances to Cuba. In this context, many Cubans inside and outside of Cuba have agreed to use this tool to receive money, even to buy products within Cuba.

There are people abroad who have access to cryptocurrency and buy products for their relatives within Cuba by paying with it. In this way, it could be considered as an advantage. However, the Cuban financial market as such is not yet sufficiently developed to accommodate them.

Cubans, who in general have a very good level of education, have found in the use of cryptocurrencies a certain way to avoid the effects of sanctions and seek alternatives for trade, to solve daily situations in the country.

What could the Cuban government do to boost the crypto economy and benefit from its use?

In the first place, the development of a market and financial institutions, much faster, deeper and more modern than those that exist today, must be promoted. Unfortunately, that does not depend on the will of the Cuban State, although much can be done about it.

In addition, international banks and institutions should be allowed access in a more expeditious manner, including some type of private banking or non-banking financial institution, more generally, within the country. But access to the phenomenon of Bitcoin and investment funds based on cryptocurrencies does not depend only on the country, but on how Cuba is seen in the international financial markets.

Definitely there we have the very negative impact of the US sanctions, which affect the image of Cuba, not only because of its own problems that the country has presented from a financial point of view, but also because of the unfair treatment that has been given to it as a result of these. sanctions, and for the deprivation of access to free trade in the international financial market.

We could also take advantage of the cryptocurrency phenomenon to become a revolutionary and entrepreneurial country, and begin to regulate and legislate regarding the use of Bitcoin, not only so as not to be left behind in terms of what the Latin American region and the Caribbean, but also as a way of responding to the development and acceptance that Bitcoin has had in Cuba in the last five years.

I believe that we should be more proactive from the legislative point of view, as other countries such as Japan, Russia, or regional bodies such as the European Union have done. In this way, we would be more prepared from the legal point of view for when it is decided – if it is decided – the use of Bitcoin to carry out official transactions or for a more generalized use within the population. All this depends on the proactivity of the Cuban State and its priorities in the short and medium term development plans.

However, we must be optimistic, because, in short, the phenomenon of cryptocurrency is going to be part of the future without a doubt, not only of the financial markets and the international economy, but also of Cuba, to a certain extent.

Startup in Cuba avoids the US blockade with bitcoins.

Money transfers from Cuban exiles are essential for many on the Caribbean island. But now the United States has stopped the flow of money. So new ideas are needed.

At the end of November, the US payment service provider Western Union processed, for the moment, the last money transfers between the United States and Cuba. Due to the new sanctions of the Trump administration against Cuba, the more than 400 branches of the company on the island had to close. A hard blow for Cubans residing in the United States who send remittances to their land of origin.

Until November, most of these transfers were handled through Western Union. So Cubans have to find new ways to support the sending of these vital foreign money transfers, one of the main sources of income for many families on the island.

The Cuban startup BitRemesas offers an alternative. Organize money transfers in the form of cryptocurrencies such as bitcoin, Ether, Doge, and others. “There is a growing community of supporters of crypto in Cuba,” says Erich García, a programmer and software developer from Havana.

This 34-year-old, who also manages his own YouTube channel with tips and solutions for using the Internet, launched the BitRemesas platform at the end of September.

Typically, to transfer money, customers go to Western Union or a bank, which charges them a commission and delivers the money to its destination. “The process is similar in our system, except that there is no bank involved,” explains García. “The money is sent to us digitally in the form of cryptocurrency and we take care of physically paying it to the client in Cuba.”

A win-win situation

The BitRemesas mechanism is very simple. García gives a practical example: “Someone from the US sends a relative through BitRemesas 100 dollars in bitcoins. We receive this 100 dollars in bitcoins and we organize an auction, let’s call it ‘negative’. There are many Cubans who want to buy cryptocurrencies . The smallest possible amount of bitcoins is auctioned. There are cases in which someone buys bitcoins for the equivalent of 88 or 92 or 93 US dollars. The difference in Bitcoin is, in this case, the profit of BitRemesas. “

The one who is willing to keep the least amount of bitcoins for the amount of Cuban convertible pesos (CUC) to which the remittance is equivalent wins. When the winner of the auction has transferred the total amount of the transfer, in this case 100 (CUC), to the recipient of the remittance, BitRemesas transfers the auctioned amount, in this case 88 or 92 or 93 dollars in bitcoins.

To understand all this, it is necessary to know that the CUC has depreciated strongly against the US dollar on the island, since the partial dollarization of Cuban retail trade. Although the official exchange rate remains 1: 1, on the black market they pay 1.50 CUC and more for one US dollar.

It is not possible to buy cryptocurrencies with CUC anywhere else. So people are satisfied with a smaller share. And, since 100 CUC is no longer 100 US dollars, but only around 66.67 dollars on the black market, they still do a good deal with the 88, 92 or 93 dollars in Bitcoin auctioned for 100 CUC.

BitRemesas currently has around 300 to 400 users. The trend is on the rise, says Garcia. In Cuba, there are an estimated 10,000 people in total who use cryptocurrencies. There are quite a few transfers, but often in small amounts of $ 10, 15, or 20, Garcia says. Since there are no fees, unlike Western Union or banks, people can also send small amounts: “Sometimes it’s $ 100, but the sums are rather small.”

Garcia’s platform collects a small margin on the respective cryptocurrency. And the person who buys the corresponding amount of cryptocurrencies receives a freely convertible alternative currency in exchange for the local CUC, internationally unusable. For García, “a win-win situation”.

Completely deregulated platform

“Cryptocurrencies give us certain freedoms that we normally do not have, since the use of financial instruments such as Visa, Mastercard, Paypal or other payment mechanisms is difficult for Cubans.” For García, this is the great advantage of cryptocurrencies in general and BitRemesas in particular. “It is a completely deregulated platform. There is no one who can block or sanction it, since cryptocurrency cannot be regulated and BitRemesas is based on cryptocurrencies.”

Not even the US Department of Justice has any legal recourse. The decades-long US blockade separates Cubans from financial markets and conventional international payment systems. Residents of the island do not receive credit or debit cards for international use. The United States sanctions against the Cuban financial institution Fincimex, which led to the closure of Western Union branches on the island, are just the latest in a long list of Washington measures against the Cuban financial sector.

“More and more Cubans use cryptocurrencies to buy or pay for services on the Internet,” says García. And he also has other ideas, such as paying the electricity bill, recharging the cell phone credit or similar, with the help of cryptocurrencies. “It is an alternative currency to which we have access in Cuba and which offers us new opportunities.”

Cryptocurrencies gain presence as remittances in Cuba

Eyonys González activated the mobile data of her cell phone, received a notification that indicated the arrival of an amount in cryptocurrencies and with a few clicks she transferred 300 Cuban pesos to the account of a compatriot, the equivalent of about 12 dollars.

Without leaving her house in Havana or touching a single bill, González acts as an intermediary who exchanges digital money for Cuban dollars or pesos, both of which are locally circulated. That is, if a family member or friend opens an electronic wallet to send cryptocurrencies, he receives them and for a commission he delivers currency that an island resident can use to buy products or pay for services.

This 33-year-old software developer is part of a small but growing community – especially young people – who use these virtual currencies to convert them into remittances in a context aggravated by the United States sanctions on the Caribbean nation and whose effect is worsened with the new coronavirus. On the other hand, although they are not regulated by any government or bank and some experts consider it a risk, some on the island acquire cryptocurrencies to protect their savings from the devaluation of the Cuban peso.

Eyonys González poses for a photo with her bitcoin wallet, at her home in Havana, Cuba, on Monday, March 29, 2021. Without leaving their homes or touching a bill, young Cuban professionals and developers are becoming more and more involved in the world of cryptocurrencies. (Ramon Espinosa / AP)
“I receive those remittances, I make the payment and use those cryptocurrencies,” explained González, a member of the online platform BitRemesas through which the operation was carried out, smiling.

Emerged in 2009, cryptocurrencies are virtual money – it does not exist in physical form – that are not backed by gold as in the past or in the wealth of a country, as in the case of national currencies that we know today.

There are no figures on the amount that is being moved in Cuba, but according to experts consulted by AP, its use has increased since the administration of former President Donald Trump began a harsher persecution of banks and investors who dared to work with the island and At the end of 2020, it suspended Western Union’s authorization to work with Cuba. At the same time, the COVID-19 pandemic forced the cancellation of flights in which the “mules” – people who are dedicated to trafficking – brought physical tickets.

The BitRemesas platform started on October 1, 2020 and already has more than 5,000 members, Erich García, a 33-year-old programmer who developed this mechanism together with a team of colleagues, explained to the AP. “The impact that the use of cryptocurrencies has had in Cuba from two years to now has been impressive. It has escalated in its use, in its interpretation, in what it is ”, explained García, an enthusiast of the possibilities offered by this digital money.

The platform was developed after many people began to trade cryptocurrencies in WhatsApp or Telegram groups and a community of interested parties became visible on the island, which has a large number of programmers, cybernetics and engineers among its professionals.

The appeal is that money can be sent to family or friends “from anywhere in the world,” without “any bank mediating,” Garcia said. “It is a huge ‘peer to peer’ (person to person) network.”

It works like this: a person abroad opens an electronic wallet – there are many pages for this on the internet – and buys cryptocurrencies – usually through international cards such as Visa and Mastercard – which they then send through BitRemesas along with the name and details of your beneficiary in Cuba.

Immediately, the platform offers this exchange to some of its members associated with the page on the island – such as González – and he converts the cryptocurrencies into local currency – dollars if it is a bank transfer or Cuban pesos if the money is delivered in physical – to be paid to whom it may concern.

There are no limits on the amounts and among the most popular cryptocurrencies on the island are Bitcoin, Ethereum, Litecoin and USDT, which González used for his operation.

The value of the change is determined by the supply and demand in the community. To date, for every 100 dollars in cryptocurrencies that someone from abroad sends to Cuba, the final recipient receives about 86 if the intermediary carries out the transaction through a bank. On the island, Cubans cannot withdraw dollars from their bank accounts, but they can buy dollars in that currency in state stores with a magnetic card provided for this purpose.

On the other hand, if the receiver on the island requires the money in cash, the intermediary can provide it by hand or through a money order and the exchange for $ 100 in cryptocurrencies would be equivalent to about 3,500 Cuban pesos. To do so, according to the state quote, it would be about 2,400 Cuban pesos and according to the black market, 4,700 pesos. Therefore, the broker and the platform get a difference that becomes their commission.

Cuba is not alone on the continent: reports to the AP in Argentina, Chile and Central America indicated that the use of cryptocurrencies is increasingly popular, even among indigenous communities in El Salvador with strong immigration and potential generators of remittances from the United States .

The head of Economy, Alejandro Gil, said in 2019 that Cuba was studying the application of cryptocurrencies “in national and international commercial relations”, given the offensive of sanctions implemented by Trump seeking to suffocate the island’s economy and pressing a change in its model. political.

So far there have been no government announcements about it and its use is controversial.

“Given the political vision behind crypto assets (cryptocurrencies) that seek the creation of private money and the denationalization of the currency, it is evident that they constitute a challenge for the Cuban government that has a statist vision, but also for the North American government that it has a sanctions stance towards Cuba, ”economist and expert on Cuban issues Arturo Lopez Levy, a professor at Holy Names University in California, told the AP.

López-Levy considered that for now there are no “private actors” on the island with the strength to generate a great business with this digital money, “but that does not mean that there are significant profit margins to be obtained in a Cuban context,” he considered Lopez-Levy.

From a completely skeptical position, Mauricio de Miranda Parrondo, economist and academic from the Javeriana University, Cali in Colombia, considered that Cuba should focus on the production of goods and services that it lacks instead of trying to solve economic problems with digital currencies. .

In general, young digital money operators on the island are aware of the dangers that the phenomenon faces worldwide – from the scams that also began to circulate on the island using cryptocurrencies, to the regulatory rumors that come from the States themselves. United – but they warn of the relief it brought to many families and the increase in its use.

Historic protests in Cuba against the government, which calls for “defending the revolution”

Exasperated by the economic crisis, thousands of Cubans demonstrated across the country on Sunday, shouting “Freedom!” and “Down with the dictatorship!”. The government said it was ready to defend the revolution “at all costs”.

“The Cuban revolution, we will defend it at all costs!” It is with these words that the Deputy Minister of Foreign Affairs of Cuba, Gerardo Peñalver, responded on Twitter to the historic protests that took place across the country on Sunday, July 11. Taken by surprise, President Miguel Diaz-Canel gave the revolutionaries “the order to fight”, calling on them to “go out into the streets where these provocations will occur, now and in the coming days”.

“Cuba is not yours!” Cried a crowd gathered in front of the offices of the Communist Party (PCC), the only political formation authorized in Cuba.

“We are hungry”, “Freedom”, “Down with the dictatorship” were some of the other slogans chanted during this eventful day, the course of which prompted the president to go to San Antonio at midday. de los Baños, small town where the first gathering was reported, then to appear on state television.

Clashes broke out, especially in Havana where the police used tear gas, fired in the air with their weapons and used plastic pipes to hit demonstrators, noted AFP journalists.

Several police cars were overturned and damaged by angry Cubans and many people were arrested.

A large police and military system has been deployed in the capital and several provincial towns.

In total, according to the datajournalism site Inventario, around forty demonstrations, scattered throughout the territory, have been identified. From midday, access to 3G was also cut in much of the country. It was not restored until mid-evening.

While he acknowledged the “dissatisfaction” that some Cubans may feel, faced with food and drug shortages, combined with daily power cuts, Miguel Diaz-Canel also accused the longtime enemy, Washington, of being to maneuver.

“There is a group of people, counterrevolutionaries, mercenaries, paid by the US government, indirectly through US government agencies, to organize these kinds of protests,” he said.

Concern in Washington

The US government reacted on Sunday by warning the Cuban authorities against any use of violence against “peaceful demonstrators”. “The United States supports freedom of expression and assembly in Cuba, and would strongly condemn any act of violence or aimed at targeting peaceful protesters who exercise their universal rights,” said the US security adviser. National, Jake Sullivan, on Twitter.

Diplomatic relations between Cuba and the United States, after a brief reconciliation between 2014 and 2016, are at their lowest since the tenure of Donald Trump, which reinforced the embargo in force since 1962, denouncing human rights violations and Havana’s support for the government of Nicolas Maduro in Venezuela.

These sanctions, as well as the absence of tourists due to the pandemic, plunged Cuba into a deep economic crisis and generated a strong social unrest, followed closely in Washington and on the American continent.

“We recognize the legitimate demand of Cuban society for medicines, food and fundamental freedoms,” tweeted Luis Almagro, secretary general of the Organization of American States (OAS).

“We condemn the Cuban dictatorial regime for calling on civilians to repress and confront those who exercise their right to demonstrate,” he added.

“The dictatorship must understand that we will not tolerate the use of brute force to silence the aspirations of the Cuban people,” US Senator Bob Menendez warned in a statement.

Demonstrations: In Cuba, the uprising of those with nothing to lose

Creating an unprecedented event, Cubans took to the streets in droves to protest against the regime. They will not bring down the government, but at least they will demonstrate that even in the communist island the power of the state is not unlimited, wants to believe this journalist published by Connectas, a platform orchestrating a collaboration between the media of Latin America.

In Cuba, certain political principles have been rehashed so much that everyone knows them. Starting with the one who postulates that “the street belongs to revolutionaries”.

On the island, politics – and the tranquility of the individual – boil down to one formula: to be or not to be revolutionary. As with Hamlet, it’s all or nothing. For those in power, this means that either we are for the government or we are against it. They are the revolution: they are his heirs and the only ones who have the truth in the matter.

On July 11, 2021, when thousands of people took to the streets to demonstrate in all provinces of the country, something remarkable and unprecedented happened in sixty years. What was fundamental in this event was not so much what it could imply for the future as the fact in itself: that the people take to the streets and occupy a sacred public space, the exclusive property of “ revolutionaries ”.

Around noon that Sunday, videos of the protests in San Antonio de los Baños began circulating on social media, a small town southwest of the capital in the hinterland. From the park, the protesters gathered in front of the headquarters of the Communist Party [PCC, the sole ruling party] and that of the local government. They arrived by bicycle, electric scooter or on foot. They all knew each other and shared the same demands, marching through shouts of “How much longer?”, “There are no drugs, no vaccines”, “Down with the government”, and “Freedom”.

Health disaster

It is less by reaction than by the effect of accumulation that the country has come to this. Cuba is going through a deep economic crisis which has repercussions on political and social life. To make matters worse, a new wave of Covid-19 cases has worsened the health situation, although the first Latin American vaccine, Abdala [produced by the state pharmaceutical group BioCubaFarma, but not recognized by the WHO] , has just been approved [by the National Medicines Regulatory Authority (Cecmed)], that a second candidate, Soberana 02 [developed by the Finlay Institute], is in the process of being marketed, and that more than ‘one million Cubans have already been fully immunized.

The numbers speak for themselves: as of April 12, 2021, just over a year after the start of the pandemic, the island had 467 deaths and 87,385 positive cases. Barely three months later, on July 12, this toll was multiplied by 2.5, rising to 1,579 deaths and 224,914 reported cases. The situation is particularly alarming in the province of Matanzas, where Varadero, the country’s main tourist destination, is located, even if the Prime Minister assures that the resurgence of cases of contamination is not linked to tourists, mostly Russian, who continue. to flock to Cuba.

Cuban Twitter users launched the #SOSMatanzas campaign, mobilizing international influencers and personalities around this hashtag, including [Lebanese-American] Mia Khalifa, [Spanish singer] Alejandro Sanz, [singer Puerto Rican reggaeton] Daddy Yankee, [Spanish actor-director] Paco León, or Residente [singer of the Puerto Rican hip-hop duo] Calle