Long before I started working, I already had my savings. I usually saved money that I got for my birthdays or from clothes that I had no use for and sold. I was a teenager when I started saving money and I thought that I was actually guaranteeing my future or something like that and that I would have some economic security in time.
Cuba's banking system is mainly composed of two state-owned banks: the Banco Nacional de Cuba and the Banco Popular de Ahorro. Both banks offer deposit, loan and currency exchange services. In addition, there are other state-owned financial institutions such as the Banco de Crédito y Comercio and the Banco Financiero Internacional, but for the ordinary citizen, only the first two are the ones we should interact with.
To give you an overview of the economic scenario in Cuba before 2021: We had two currencies in circulation, the Cuban peso (CUP) and the convertible peso (CUC) which had a value of 25 Cuban pesos and was "the equivalent" of the U.S. dollar. With the CUC you could buy almost all products, if you had 100 CUC, for example, you could go home with enough food (let's say a very full supermarket cart, although in Cuba they are not used to use them because people go to the stores with just enough money).
Before the "Economic Ordering", a process that happened in January 2021 in our country, my dad had recommended me to keep my savings in the bank, in a savings account. He didn't really give me any specific reason other than to have it saved, since here they don't offer attractive interest and you can't move it freely once it's deposited. But well, I did it, and now I will tell you everything that followed.
It turns out that the government decided in December 2020 that it was time to "eliminate the CUC" and give absolute prominence to the national currency. This measure was taken in times of COVID-19 pandemic, when the country was still practically at a standstill, but it did not matter, the "Ordering Task" was executed because for some time "it had been necessary" to carry out a remodeling of the economic system in Cuba.
But as you can guess, an economic law launched in a crisis scenario had no other result than to inflate even more the value of the dollar in the informal market. For the official exchange rate of the old CUC to Cuban pesos occurred with the value of 24 pesos. My bank savings evaporated if we analyze now in retrospect and see that the value of a dollar has reached almost 200 Cuban pesos in the informal market.
Inflation has worsened in our country over the last three years and is also a product of shortages and production brakes. To give an example, a 20 MLC block of cheese (another virtual currency that emerged around 2020) doubled and even tripled its value for the same amount of cheese. I know that the world economic scenario was more of a crisis, but in Cuba a disaster of this type could be seen coming due to the dependence on imports in almost all economic sectors.
Then, from the evil that was to be solved, a hundred heads emerged, or at least five, so as not to be metaphorical. It turns out that they wanted to leave only the Cuban peso in circulation and now the US dollar and the Euro are circulating in Cuba with greater strength, as well as other currencies such as the Russian ruble, the Mexican peso and the pound sterling. Again, the Central Bank wanted to control the circulation of these currencies and began to buy them at a price closer to that of the informal market.
For example, you can sell 100 dollars to the bank and they will pay you 110 Cuban pesos for each dollar (remember that in the informal market it is oscillating 195 pesos). This measure had the idea of capturing the circulating foreign currency to be able to continue importing goods from abroad, because although in Cuba some economic actors have been liberated, domestic production remains rather discreet due to the financial persecution of the United States and economic management problems such as the aforementioned "Task Ordering".
At the end of 2021 I discovered cryptocurrencies. Since then I have learned that in this fascinating world of Web3 there are so many opportunities to save that sometimes it can be overwhelming or confusing where to put your savings. Personally, I have not exploited as I should the options I will tell you about, but I think it is worth highlighting if we take into account that it works on a small scale.
If you want to be your own bank, you will have to study everything you can, nobody is going to tell you a magic solution. In my case, I recommend that you pay attention to all the terms I will discuss below. After you do it, study them again (Yes, do your analysis very well before making any decision).
Staking: There are projects and blockchains that offer very interesting returns on investment. Hive for example has an APR of 20%, study well each opportunity and value in which to put your savings.
DCA: This consists of buying a little bit of cryptocurrencies that tend to retain their value over time, such as Bitcoin, for example. It is very useful because it relies on making constant microinvestments to ensure a good portfolio.
Holding: This is a favorite of those with patience and long-sightedness. But if you trusted a bank to hold your money, here on the Web3 if you own your own keys of the wallets you use you have nothing to fear, if you invested in valuable currencies, time will reward you.
Why trust a traditional bank, if they are used to devalue our money. Historically they have done it by printing money. We are witnessing an economic revolution in which we should not depend on financial institutions, that is really scary because it is an unknown scenario, but at the same time, it is extremely exciting to be part of it from the very beginning.
.Cover image edited on Canva free version using
the Eric´s Anada, photo, on Pexels.
Post writen in spanish
and translated with Deepl to English.
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