Frustration as Long Lines Signal Cuba's Cash Crisis

Cuba is grappling with a severe cash shortage that has led to lengthy queues at banks and ATMs throughout Havana and other regions. This shortage is a symptom of the nation's dire economic crisis, one of its most severe in recent history. Experts, including Cuban economist Omar Everleny Pérez, cite several contributing factors: a growing fiscal deficit, the lack of high-denomination banknotes exceeding 1,000 Cuban pesos (equivalent to roughly $3 on the parallel market), soaring inflation, and a failure to recirculate cash back into banks.

Compounding the problem is the fact that the majority of available cash is in the hands of entrepreneurs and small-business owners. These individuals typically need to import goods or pay for supplies in foreign currency, which further strains the limited cash supply. Cuba's monetary system is intricate, with multiple currencies and exchange rates in circulation, including a virtual currency known as MLC introduced in 2019.

In response to the cash flow crisis, the Cuban government has unveiled plans to transition to a "cashless society" by the year 2023. This initiative includes the mandatory use of credit cards for certain transactions. However, there is resistance from businesses that are reluctant to accept credit card payments, signaling challenges ahead for the government's cashless agenda.