This week we interviewed Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation and author of the recent article Cuba’s Bitcoin Revolution, about his thoughts on recent recognition of and regulations surrounding the use of cryptocurrencies by Cuba’s government and the potential benefits of cryptocurrencies for average Cuban citizens.
To read part one of this week’s interview with Alex Gladstein, visit the “In Cuba” section. Part two will be published next week. The full interview can be viewed on our website.
Yesterday, Cuba reported 7,695 COVID-19 cases. There are currently 36,795 total active cases of COVID-19 on the island. Pinar del Río reported the highest number of new cases for the fourth consecutive week at 1,864. The total number of cases since March of 2020 is 839,981 and the total number of deaths since March of 2020 is 7,104. Cuba is hoping to vaccinate 90 percent of the population by November and currently, there is approximately 76 percent of the population partially or fully vaccinated. For a graph of case numbers since March 2020, see here. For a detailed breakdown of all COVID-19 data, visit this website.
This week, in Cuba news…
During a speech to the United Nations General Assembly (UNGA) on Thursday, Cuba’s President Miguel Díaz-Canel accused the U.S. of becoming more aggressive with its policies towards Cuba, the Miami Herald reports. President Díaz-Canel also alleged that the U.S. was waging an “unconventional war” through social media and funding a campaign of “manipulation and lies” aimed at destabilizing the island. President Biden spoke briefly about Cuba during his speech at the UNGA on Tuesday while discussing the tension between democracy and authoritarianism in the modern world. President Díaz-Canel responded to President Biden’s speech on Twitter by publishing an image of Haitian immigrants being charged at by a U.S. border patrol guard on horseback with a caption questioning the U.S.’s authority to condemn Cuba for human rights violations. Cuba’s Foreign Minister Bruno Rodríguez also responded to President Biden’s speech, saying that the President “lacks moral authority” to promote peaceful initiatives. On Friday, the final day if the UN General Assembly, the U.S. State Department published a statement by Secretary of State Antony J. Blinkin noting that the UN is a forum to discuss pressing issues such as human rights, and stating that “It is vital that the international community speak out against the repression and mass arrests of Cuban protestors; demand the release of those unjustly imprisoned there; and support the Cuban people’s desire to determine their own future.” The statement also urges Cuba’s government to respect human rights.
President Díaz-Canel announced at the UNGA on Thursday that Cuba expects to reach full immunization against COVID-19 by the end of the year, The New York Times reports. As Cuba faces a massive surge in COVID-19 cases due to the Delta variant, the President stated that more than one-third of the island’s population has been fully vaccinated thus far. As part of efforts to vaccinate the entire population, Cuba began vaccinating children ages 2 to 18 earlier this month, making Cuba the first country in the world to inoculate children under 12. Both of Cuba’s domestically produced vaccines have gained approval by local regulatory authorities, however, neither have yet been recognized by the World Health Organization (WHO) nor have they undergone peer-review. Last week, representatives from Cuba’s healthcare sector met with the WHO to review Cuba’s domestically produced vaccines and begin the process for potential authorization.
Since the COVID-19 pandemic stopped international travel to Cuba, tourism to the island has all but halted, with the exception of Russian tourists, the Miami Herald reports. Due to increased travel restrictions from the U.S. government and COVID-19 regulations, both Canadians and Americans have ostensibly stopped visiting the island during the past two years. On the other hand, between January and July of 2021, travel by Russian tourists has grown 42 percent from the last year. Cuba’s government has reported that the overall number of visitors to the island fell 86 percent from 2020. Cuba initially closed its borders in March 2020 and reported minimal cases of COVID-19 until the end of 2020. The rise of COVID-19 cases in Cuba began after the island reopened its borders in November 2020. It’s been reported that the recent spike in cases is attributed to the introduction of the Delta variant brought to the island by international travelers.
This month, Cuba’s Ministry of Tourism (MINTUR) announced that the country will begin to reopen its borders to tourists on November 15. By this date, Cuba’s government expects to have 90 percent of its population fully vaccinated against COVID-19. According to MINTUR, following the gradual reopening of Cuba’s borders “in correspondence with the epidemiological indicators of each territory,” the island will begin to relax current health and hygiene protocols to accommodate tourists. Travelers will still be subjected to some diagnostic tests and protocols; however, they will no longer be required to quarantine or complete a PCR test. Due to the immense surge in COVID-19 cases, many are concerned that the projected date to reopen borders is too soon and could worsen the already devastating situation. On the other hand, some have argued that while there is reason for concern, the current economic and humanitarian crisis would greatly benefit from added revenue generated by tourism. Lack of tourism, among other factors, has devastated the Cuban economy, which shrank 11 percent last year.
Through a joint operation with Interpol, Uruguay’s Interior Ministry announced that a human-smuggling network which trafficked Cuban migrants, has been dismantled, Insight Crime reports. The joint operation detained 34 Cuban citizens traveling within the increasingly popular human-smuggling network. The route encouraged Cubans in Havana to fly to Guyana, which does not require a visa for Cubans, and subsequently travel across Brazil to be smuggled into Uruguay. As of 2019, Cubans became the largest population of migrants in Uruguay. Once in Uruguay, some Cubans claimed refugee status while others paid high prices, between $6,000 and $7,000, to continue to the U.S. Investigators also suspect that the network had contacts across the region due to the discovery of money transfers to Ecuador, Honduras, Mexico, and Peru. Previously in 2018, Interpol investigated and uncovered a human-smuggling network with a nearly identical modus operandi involving Cuban migrants traveling to Uruguay. The cost of the journey was between $3,000 and $4,000 per person.
Interview with Alex Gladstein on Cryptocurrency Regulations and Use in Cuba – Part One See full interview on our website.
CDA: The introduction of cryptocurrencies has been celebrated as a means to open Cuba up to unregulated global markets, free of numerous obstacles, including those caused by U.S. sanctions. How could cryptocurrencies increase the average Cuban’s ability to access capital? How do you think Cubans can benefit from participating in an unregulated and trustless financial system?
Alex Gladstein: First, we have to look at the word “unregulated,” and understand that regulations are not moral all the time. The monetary regulations from the Cuban government are, in my mind, immoral. I think what’s happening inside Cuba with regard to currency and its MLC [Moneda Libremente Convertible or freely convertible currency] system where the state pays in MLC but forces people to purchase goods in foreign currency, the devaluation of its currency, and so on, is very corrupt and painful for the citizenry. In the context of discussing regulations and morality, I view cryptocurrencies, at least Bitcoin, as a liberation tool. With Bitcoin, people can put their time and energy into something other than the peso that, over time, will actually appreciate [grow] their purchasing power instead of losing it.
The other part to consider is the embargo. Country-wide sanctions and what the U.S. government did with regard to restrictions on remittances through traditional channels, such as Western Union, has made it really difficult for families to connect with each other and really hurts the average person. I also see these regulations as immoral. In that aspect, Bitcoin is really helpful, because it allows families in Cuba, individuals, businesses, and so on to directly receive value from the United States. Bitcoin is an open monetary network which means that you can connect with any Cuban Bitcoin platform, such as Bitremesas or any other informal Cuban business that does a peer-to-peer exchange, through Bitcoin. That’s the whole point. The U.S. government has no jurisdiction over the open monetary network of Bitcoin and lightning; they can’t control it. As soon as you can touch the open Bitcoin monetary network, you can then transact with any other Bitcoin compatible platform in the world, and you can send money directly to your family.
I would argue Bitcoin is even better than the existing options from Europe and Canada, where you can move your money, but it’s still not the easiest thing in the world. Sending a lightning transaction from one Bitcoin wallet to another is the easiest thing in the world. I think the [introduction of cryptocurrencies]is a big humanitarian upgrade for people who are willing to learn about it and start using it both as a savings instrument and as a cross-border payments tool.
As a human rights activist, another important aspect associated with Cubans’ integration into this system is that they can become their own banks. Cubans can control their own Bitcoin, unlike in traditional banking. With a widespread penetration of this monetary technology throughout Cuba, where humans are their own bank, there can’t be a “rug-pull” like there was in 2004. In 2004 [referring to changes in regulations with U.S. dollars], citizens had dollars until suddenly, the government changed their payment system and took dollars away from Cubans. That can’t happen if the citizens are holding their own Bitcoin.
I think it’s inarguable that Bitcoin is playing a big humanitarian role by getting value into Cuba and helping Cubans save. In the future, if used properly, it can prevent future rug-pull scenarios.
CDA: Circumventing sanctions through digital currencies could allow Cubans to receive remittances with ease through platforms like Bitremesas. Still, digital currencies, such as Bitcoin, can have transaction fees that exceed the monthly income of an average Cuban citizen. While Bitcoin recently announced the implementation of a scaling solution lightning network which they promise will better facilitate small transactions such as remittances, how, if at all, can it be ensured that Bitcoin’s scaling solution lightning network works as intended in a country like Cuba? Are cryptocurrencies accessible and affordable for ordinary Cuban citizens?
Alex Gladstein: Lightning is very important. While fees are quite low right now at about less than $1, $1 is still a nice chunk for someone living and making an average salary in Cuba. So, we want to make fees as low as possible. One of the problems with traditional institutions like Western Union, which I still believe should be reinstated, is that the system, in my opinion, is also exploitative because it uses official exchange rates and has high fees. With Bitcoin through the lightning network, it would cost a fraction of a cent to send any amount from the United States to Cuba, it’s done instantly, and its final settlement. Currently, it’s pretty trivial to sell Bitcoin for MLC in peer-to-peer marketplaces in Cuba. So, even if we consider that there are few things that you can buy with Bitcoin in Cuba currently and Bitcoin would likely have to be sold for currency first, the process is still easy and affordable for the average Cuban. There’s no counterparty risk and it’s instant. This is a much bigger upgrade.
Ordinary Cubans can benefit immensely from cryptocurrencies now. For anyone with family or friends in Cuba, you can get money to them within minutes, without interference, and the Cubans get to decide what to do with it. They can decide if they want to risk some short-term volatility and hold it for future benefit in three, four or five years from now. Or, if they need to spend it immediately on food or other necessities, then they can convert it to MLC and use it as is needed. Without Bitcoin, you don’t have this option.
According to the inventor of Bitremesas [a person-to-person Bitcoin exchange platform designed for the transfer of remittances from abroad to Cuba], hundreds of thousands of Cubans have used Bitcoin, or are in the Bitcoin economy in some way. Their use of Bitcoin is a peaceful protest against monetary repression first and foremost by, what in my opinion, is a horrible currency system created by Cuba’s government, which is robbing people of their time and energy, and stealing hard currency from the outside world. It also protests, what I think are ineffective and immoral, broad-based country sanctions from the U.S. that are operating on a vendetta of sorts from decades ago. The sanctions are not relevant to the average Cuban or to young Cubans who are suffering and facing a food shortage. While holding individuals in the regime accountable is necessary, country-wide sanctions are overly punitive and ineffective, and preventing Cuban Americans from sending family to their relatives is cruel. So, in response, cryptocurrencies are a technology that allows everyone to keep connecting with their family no matter what.
CDA: In terms of the relationship between U.S. policies and economic freedoms in Cuba, within the context of digital assets, are U.S. policies, in any way, preventing the use and potential benefits of cryptocurrencies in Cuba? How could the U.S. bolster the economic benefits of cryptocurrencies for ordinary Cubans? Is there a relationship between the expansion of cryptocurrencies in Cuba and supporting U.S. interests?
Alex Gladstein: Currently, it’s about getting U.S. policymakers to understand that if their goal is to empower, to help, and to be a bridge to people who are suffering, then they need to consider using this tool. U.S. officials are going to have to think: Is it our goal to punish or is our goal to empower? Allowing U.S. financial technology (FinTech) in Cuba would be huge for empowerment.
Outside of maintaining the unreasonable and harmful policies that the Trump administration imposed, the current Administration has done nothing. Meanwhile, Cubans are suffering. The government should be fixing our failures and building bridges, not walls. This is very clear to me. What’s remarkable is that we spent hundreds of millions of dollars on democracy promotion in Cuba over the last 20 years and they haven’t really delivered what we expected. The regime is still there, and people are suffering worse than they have been since the Special Period. This open-source currency, which the U.S. government has somewhat of an adversarial relationship to, is doing more for freedom in Cuba than any of our democracy programs.
I think that the best thing we could do is expand access to Bitcoin inside Cuba. It leads to more freedom for the Cuban people, and it leads to an erosion of power in the Cuban regime. Currently, as with any authoritarian system, one of the keyways they hold power is through the economy and through, especially in this case, a centralized state planned economy. So, if more and more people are being their own bank, then that means there’s less power for the Cuban central bank and less power for the Cuban government.
With companies such as Strike [which allows users to send payments globally with little to no fee using Bitcoin], which is currently prohibited from operating in Cuba due to U.S. restrictions, Cubans would only need the app, not even a bank account, to receive payments. The app is pegged to the U.S. dollar, which would allow Cubans to avoid volatilities and still receive these incredible instant Bitcoin remittances from anywhere. If the Administration is looking for ways to help, they could lift sanctions on American FinTech and allow people in Cuba to utilize the technologies, which is well within their power.
If you want freedom in Cuba and if you want individual human liberty for Cubans themselves, then we should be working to promote this open-source currency inside that country, or at least helping allow American companies to do so if they wish. I don’t necessarily think the U.S. government should be “involved,” but they should, at least, allow private citizens to do what they want to do.
CUBA’S FOREIGN RELATIONS
After approving Cuba’s Abdala vaccine for emergency use in Vietnam on Saturday, Vietnam’s President Nguyen Xuan Phuc signed a deal to buy 10 million doses from Cuba, France 24 reports. Vietnam’s President visited Cuba last weekend to sign the deal, as Vietnam battles its worst outbreak of COVID-19 since the beginning of the pandemic and has one of the lowest vaccination rates in the region. After signing the agreement, Vietnam became the first foreign country to approve the use of Cuba’s domestically produced vaccine. Iran is also currently producing the Soberana vaccine and Venezuela, Mexico, and Argentina have expressed interest. In August, Vietnam and Cuba announced that Cuba would supply the Southeast Asian country with the Abdala vaccine and vaccine production technology by the end of the year. Vietnam also donated 12 thousand tons of rice to Cuba at the end of August, leading to the two countries reaffirming “the excellent state of political ties.” Vietnam and Cuba have a history of cooperation and Vietnam has previously donated rice to Cuba. Additionally, the two countries signed several bilateral agreements aimed at strengthening economic ventures and cooperation, specifically in the sectors of agri-food, aquaculture, biotechnology, and oil exploration.
Last week, an Australian company began drilling exploratory oil wells outside of Matanzas, Cuba, The Miami Herald reports. Australia’s Melbana Energy Ltd. received the rights to drill onshore in 2015 after believing that the area, which has known oil fields and several refineries currently, could produce light crude oil. The area had been managed by CUPET, Cuba’s largest oil company, for 30 years until Melbana gained drilling rights. Many international companies have avoided drilling in Cuba due to poor quality oil and complex processes to extract the island’s heavy oil. Under its current projections, Melbana estimated that the site could produce up to 141 million barrels of oil. However, given the previous lack of success under CUPET, some are questioning the validity of such promising projections. The announcement has also generated attention due to a joint venture in 2019 between Melbana and Angola’s national oil company SONANGOL, which is currently the main financier of oil exploration in Cuba.
RECOMMENDED READINGS & VIEWINGS
Despite Censorship and Poor Internet, Cuban Podcasts are Booming, Ernesto Londoño, The New York Times
This article highlights the rise of podcasts produced in Cuba, despite government censorship and poor internet. Since the recent expansion of internet access beginning in 2015, podcasts on a variety of topics have transformed the transfer of information on the island and created a space for content generated by Cubans. Additionally, the New York Times article highlights a variety of the podcasts and interviews some of the creators behind them.
Entrepreneur Spotlight: ReglaSOUL, Cuba Candela
This article from Cuba Candela highlights the Cuban holistic wellness community project ReglaSOUL and its commitment to providing wellness resources to Afro-Cubans in Regla, Havana. Cuba Candela interviews ReglaSOUL’s owners about the challenging and rewarding aspects of starting a company in Cuba, the impact of American travel, and their Afro-Cuban heritage.
This initiative from Cuban digital platform, Tunturuntu, highlights messages from Cuban artists, musicians, influencers, and YouTubers voicing their support for animal rights. Thus far, the platform has gathered 46 such individuals to share photos and messages of love for animals.
How the Cuban Diaspora Finds Its Place in Miami Through Food and Culture, Carlos Frías, Eating Well
This article follows cookbook author and TV host Padma Lakshmi while she explores various foods and restaurants throughout Miami during her show Taste the Nation. The article explores how Cuban culture in the U.S. can be understood through food and experiences around the dinner table. In addition to trying various foods, the article describes cultural norms and traditions in Cuban American culture that revolve around food.
What to Know About ‘Havana Syndrome’, the Mysterious Illness Affecting U.S. Officials Around the World, Miriam Berger, The Washington Post
Miriam Berger’s article in the Washington Post attempts to explain the health incidents, previously identified as ‘Havana Syndrome,’ that affected U.S. personnel around the world. Specifically, the article explores what the incidents entailed and related symptoms, when the incidents were first documented, potential causes, and the U.S.’s response.
Why Electric Cars Could Make American Roads Resemble Cuba, Mike Seeley, The New York Times
In this article, Mike Seeley describes how rural American roads may begin to resemble Cuban roads as the U.S. moves away from gasoline engines and towards electric vehicles. According to the article, experts theorize that older cars running on gasoline engines may be preserved with similar methods currently found in Cuba. The article also compares the automotive and energy industries in both countries.
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