Cuba’s current economic situation is slightly reminiscent of the ‘special period’ after the fall of the Soviet Union. Heavy sanctions on the importation of oil and decreased financial aid from other countries have led to shortages in food and medicine.
In other countries like Venezuela and Iran, who are also suffering from economic crises, digital currencies may come for the forefront as a way to mitigate the problems of the state.
Trouble in Cuba
Cuba’s economy has taken multiple devastating blows in the past year, leaving its citizens hungry and without some necessary medicines.
Time reports that the current economy is the worst Cuba has seen in decades. It cites sanctions on oil coming from Venezuela, poor performing industry sectors, and minuscule GDP growth as reasons for its wounded state.
Simple food products and materials like eggs, chicken, and rice are becoming scarce to find in stores, while some even wait for hours to try and get supplies from food trucks.
Turn to Crypto
An interesting trend is beginning to emerge among countries with poorly performing economies, like Venezuela and Iran.
Venezuela has recently reached all-time high levels of inflation, projected to reach 10 million percent this year. Its Bolivar notes are essentially worth less than the paper they are printed on, and its citizens are looking for any exit they can find to get out of the mess.
Many Venezuelans have been turning to cryptocurrency as a way to get out of the crossfire and move away from their depreciating fiat currency.
Bitcoin exchange volume in South America has been surging while their respective economies continue to suffer. Last week, more than 100,000 BTC were exchanged in a single day in Brazil.
It will be interesting to see if the people of Cuba begin to follow a similar path and explore other stores of value like cryptocurrencies as a way to sit on the sidelines.
Do you think Cubans will start to turn to digital currencies to escape the current volatile economy? Let us know your thoughts in the comments below.
Images courtesy of Shutterstock.