Crypto May Shine As Western Union Shuts Down Services in Cuba
Last week, Western Union, the world’s largest money transfer service, announced it would be suspending its U.S. dollar transfer service to Cuba following the Trump Administration’s latest sanctions.
Fresh reports today revealed that the remittance giant has finally closed its 407 locations across Cuba after more than 20 years of operation. This means U.S. customers can no longer send money to Cuba, and Cuban users will no longer receive funds.
According to Reuters, the remittance market is Cuba’s third-largest revenue source after the services industry and tourism, with an annual turnout of $2 billion to $3 billion.
Western Union is practically the biggest U.S. to Cuba remittance payment provider. The U.S.-Cuba Trade and Economic Council president, John Kavulich, said that the company processed more than $1 billion of the money transfer from the U.S. to Cuba in 2019.
Although the U.S. President-elect Joe Biden plans to lift some of the sanctions on money transfer, it would likely take some time.
Crypto to the Rescue?
Many Cubans are lamenting about the closure as the move has forced them to look for less convenient or expensive alternatives to bring money into the country.
Although locals say “there are no safe services,” cryptocurrencies are very efficient and secure for cross-border payments. And according to Reuters, crypto exchanges have started promoting themselves as a better alternative.
An increasing number of Cubans Americans are already transferring funds to their relatives in Cuba through crypto wallets and exchanges. Residents can use their digital currencies to consume digital services by purchasing cards from stores like Bitrefill.
But Kavulich believes crypto has its limitations, such as price volatility and internet requirement, which is still a problem in the country.
Meanwhile, countries like Venezuela and Iran facing U.S. sanctions have turned to cryptocurrencies to pay for global trade. Last month, Iran announced that it buy freshly mined BTC from local miners to finance its international transactions.