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Cuba Studying Potential Use of Cryptocurrency to Boost its Economy

Cuba's inefficient state-run economy is facing a crisis due to a sharp decline in Venezuelan aid, lower exports

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FILE - Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies, Feb. 13, 2018. Switzerland's government wants to look into the feasibility of launching its own state-backed cryptocurrency. VOA

Cuba’s Communist government said on Tuesday it was studying the potential use of cryptocurrency as part of a series of measures to boost its economy amid a deepening crisis exacerbated by U.S. 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 U.S. sanctions and weather hyperinflation, although it never properly got off the ground.

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 U.S. trade embargo under President Donald Trump.

The new measures, announced on a roundtable 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 economy’s started by the island nation’s previous president, Raul Castro.

Cuba, Cruptocurrency, Economy
Cuba’s Communist government said on Tuesday it was studying the potential use of cryptocurrency. Pixabay

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

“We are studying the potential use of cryptocurrency … in our national and international commercial transactions, and we are working on that together with academics,” Economy Minister Alejandro Gil Fernandez said.

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 sufficient to breach the gap between salaries and the cost of living.

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Nonetheless it should boost purchasing power, as long as inflation is kept in check.

“It’s not ideal, but it’s an advance,” said Pavel Joaquin Hernandez, 46, a general practitioner who will go from earning the equivalent of around $40 per month to $64.

Cuban economist Omar Everleny said the raise was crucial given how demotivated workers were, with many emigrating.

“For the first time, (the government) is linking the fact that everything can be achieved if workers are motivated,” he said.

Cuba, Cruptocurrency, Economy
Cryptocurrency, which allows financial operations to be carried out anonymously, has been used in the past. Pixabay

Gil Fernandez said the government was also broadening a series of measures aimed at decentralizing and thus improving state-run company performance and stimulating local production, substitution of imports and increasing exports. For example, he said, financial service companies would be established to provide cash in the face of opportunity more quickly than the centralized planning system.

The government would also expand a system allowing some companies to keep a percentage of the hard currency they earn in order to reinvest it immediately rather than have to apply for credit.

State companies, agricultural entities and other economic actors that supply a growing number of firms in the Mariel Special Economic Zone, a project resembling China’s first capitalist oasis, would receive a percentage of sales in hard currency, Gil Fernandez said.

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The government was also studying how to allow the growing number of small private businesses to export through the state-run businesses, he said. (VOA)

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“India Has Opportunity To Become One of The Top Three Economies in The World”, Says Reliance Chairman Mukesh Ambani

The RIL chairman said that empowering small and medium businesses would be key to driving India's growth faster

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Mukesh Ambani
The RIL chairman said that empowering small and medium businesses would be key to driving India's growth faster. Wikimedia Commons

Riding on the power of technology, India has the opportunity to become a premier digital society and one of the top three economies in the world, Reliance Industries Ltd (RIL) Chairman and Managing Director Mukesh Ambani said here on Monday.

Ambani said that India has the opportunity to become the most technically-enabled society where all the development could be powered by the tools of technology. “We can argue about whether it will happen in five years or 10 years but it is going to happen, and we will be in the top three countries in the world,” he said in a fireside chat with Microsoft CEO Satya Nadella.

The RIL chairman said that empowering small and medium businesses would be key to driving India’s growth faster. “Every small business and entrepreneur in India has the potential to become a Dhirubhai Ambani or Bill Gates. And that is the power that differentiates India from the rest of the world,” he said during Microsoft’s “Future Decoded Summit” here.

“I think that the entrepreneurial power that we have at the grassroots is enormous. We have to realise that small, medium and micro enterprises provide 70 per cent of India’s employment. They drive 40 per cent of India’s exports,” Ambani added. India has transformed tremendously over the past two decades — from a $300 billion economy in early 1990s to becoming a $3 trillion economy in 2020.

“And I think, I can easily say that the mobile networks in India now are better or at par with anybody else in the world,” he said. About 38 crore people have migrated to the 4G technology platform offered by Jio in about three years, Ambani informed, adding that since the establishment of Jio, average data rate has come down drastically in India — from Rs 300-Rs 500 per GB to Rs 12-Rs14 per GB.

Congratulating Nadella for his leadership of the organisation, Ambani said that the collaboration between Microsoft and Jio would be a defining partnership of the decade. RIL in August last year announced partnership of its subsidiary Reliance Jio Infocomm with Microsoft in the technology space, including creation on cloud solutions.

As per the partnership, Jio will leverage the Microsoft Azure cloud platform to develop innovative cloud solutions focused on the needs of Indian businesses. Jio will set up data centres in locations across India, consisting of next-generation compute, storage and networking capabilities, and Microsoft will deploy its Azure platform in these data centres to support Jio’s offerings.

Mukesh Ambani
Riding on the power of technology, India has the opportunity to become a premier digital society and one of the top three economies in the world, Reliance Industries Ltd (RIL) Chairman and Managing Director Mukesh Ambani said here on Monday. Wikimedia Commons

Nadella said that the mission of Microsoft is to help organisation to become independent — not dependent — to build their own Artificial Intelligence and other tech capabilities, and tech intensity. “In the next decade, our main investment will be on making software engineeres that organisations hire more productive,” Nadella said, adding that Microsoft will build complete toolchain for developers.

The Microsoft CEO said that the increasing rate of digitization of people, places, and things, will be the defining secular trend over the next 10 years. Saying that Microsoft’s differentiated approach across the cloud and edge is winning customers, Nadella said that Microsoft now has 57 data centre regions in the world.

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In India, Microsoft has three data centre regions — Mumbai, Pune and Chennai — besides a Cybersecurity Engagement Centre in New Delhi. (IANS)