Western Union disables all US-Cuba transfers because of the imposed US sanctions so now the people in Cuba are looking a way out with Bitcoin. In today’s Bitcoin news, we are reading more about the ways to help people.
The money transfer services were a major player in Cuba’s economy but now, Bitcoin solutions could start taking over. Western Union disables all US-Cuba transfers because of the heavily imposed US sanctions. Cubans are therefore turning to Bitcoin. After this weekend, the remittance venues will be cut off and Americans will no longer be able to transfer money to Cuba with Western Union. The transfer service which dominates the remittance industry has a market cap of about $9 billion and said that they will be pulling services because of the US sanctions against Cuba’s communist government.
Western Union doesn’t need to serve Cuba to remain profitable. MoneyGram did fine without the Cuban market as well. however, Cubans will need to find a way to receive money from abroad. But fear no more, bitcoin could fix this. According to a new 2020 Florida International University Study, about $2 to $4 billion every year is sent from the US to Cuba in a mix of formal and informal channels. More than half of the Cuban Americans are sending money to relatives in Cuba so there’s strong evidence that the cash injections are a very important role in the Cuban economy.
However, the US-Cuba remittances are now under threat. While trying to put pressure on Cuba’s communist government, the Trump administration reversed a few Obama-era moves in order to normalize the relations with Cuba. The US Treasury Department back in 2019 forbade all remittances to Cuban government officials so that the US dollar doesn’t “enrich” the Cuban regime. Therefore, they limited the size and frequency of the remittances to family members. After the new restrictions, Western Union decided to pull out:
“For more than 20 years, Western Union has been moving money to Cuba on behalf of our customers to family and loved ones to pay for food, rent, and other expenses including micro-businesses. We sincerely regret this situation and its impact on our customers.”
Co-founder of the Open Money Initiative Alejandro Machado said:
“If the bloodline of a business isn’t to provide services to Venezuelans, lawyers often advise to stay clear of Venezuela to avoid trouble—and firms like Western Union don’t necessarily have the risk appetite to serve a country like Cuba.”