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Cuba looks to cryptocurrency

Cuba’s Communist government announced on Tuesday it is studying the potential use of cryptocurrency as part of a series of measures to boost its economy amid a deepening crisis exacerbated by US sanctions.

Cryptocurrency, which allows financial operations to be carried out anonymously, has been used in the past to get around capital controls. Cuba’s top ally Venezuela introduced a cryptocurrency last year aiming to avoid US sanctions and weather hyperinflation, although it never properly launched.

Cuba’s inefficient state-run economy is facing a crisis due to a sharp decline in Venezuelan aid, lower exports and the tightening of the decades-old US trade embargo under President Donald Trump.

The new measures, announced on state-run TV by President Miguel Diaz-Canel and his government, will raise income for around a quarter of the population and deepen market reforms of one of the world’s last Soviet-style command economies started by the island nation’s previous president, Raul Castro.

The aim is to raise national production and demand to boost growth as US sanctions target tourism and foreign investment. Mr Diaz-Canel, working to establish his legitimacy after assuming the presidency in April 2018, said the government is working on the details of the implementation.

The most popular measure in the new package will likely be the hikes in some pensions and wages for workers in public administration, social services and state-run media, bringing the medium monthly wage in those sectors up to the equivalent of $44.5 from around $25 previously.

Many Cubans say the measure still will not be enough to breach the gap between salaries and the cost of living. Nonetheless it should boost purchasing power, if inflation is kept in check.

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