CryptomuntenThe Cuban government is investigating the possibility of accepting bitcoin and other cryptocurrencies as a means of payment and regulating their use. The country sees this as a means of circumventing US economic sanctions. Earlier this year made El Salvador becomes the first country in the world Bitcoin is legal tender.
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It was announced in a state newspaper that the Cuban central bank “may allow the use of cryptocurrencies for socio-economic purposes”. The central bank will work out rules for who can and may use them in what way within the communist state. However, the institution warns that individual use of cryptocurrencies is at your own risk.
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The popularity of digital coins has risen sharply on the island as the Cuban peso has fallen sharply in value. Normally you can also pay with US dollars in Cuba, but that is more difficult since the stricter US economic sanctions under Donald Trump’s policy. Current US President Joe Biden also appears to be following that stricter line.
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Cryptocurrencies such as bitcoin make it possible to conduct financial transactions anonymously. They work in a decentralized way on the basis of blockchain technology, with a collective log in which all participants together keep track of all transactions. Tracking and verifying those transactions is called ‘mining’.
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Landen vs. bitcoin
Countries worldwide are struggling about how to deal with a decentralized currency like bitcoin. The price of the digital currency rose in April to a record $ 65,000 (55,000 euros), but then fell sharply. Partly because she faced headwinds from China. The exchange rate dropped below 30,000 dollars (25,400 euros), but has since been on the rise and is now about 48,000 dollars (41,000 euros).
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China banned banks from cooperating in bitcoin transactions. Beijing also stepped up the fight against bitcoin mining. To verify bitcoin transactions, special computer systems worldwide are puzzling all day long, which consumes a lot of energy. Also Iran has temporarily banned bitcoin mining for fear of power outages.
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South American countries are more positive about bitcoin. The Savior turns bitcoin into legal tender as the first country in the world. Cryptocurrencies are also popular in countries such as Argentina and Venezuela, which suffer from hyperinflation. In Panama, a neighboring country of El Salvador, there are also legislative initiatives to make bitcoin legal.
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In Europe, especially Switzerland known as one of the most enthusiastic countries regarding cryptocurrencies. The city of Zug in particular is a real hub for crypto companies, which can even pay their taxes in bitcoin.
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Volatility
Bitcoin, Ethereum and other cryptocurrencies or ‘altcoins’ are very volatile or fluctuate rapidly in value, making them unsuitable as a means of payment according to some experts. On the other hand, the growing interest from institutions and companies, according to insiders, is helping to slowly make the currency widely accepted.
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