Cuba creates a new money-transfer agency
Cuban exiles might ask: If Cuba's new agency to handle electronic cash transfers from abroad is controlled by the military, like the old agency, what's the point?
This week the Cuban government introduced a new agency to handle electronic cash transfers to the island from abroad. But the big question everyone’s asking is … why?
Orbit is the name of the new state-run Cuban firm for handling the money, usually called remittances, that folks like Cuban exiles here send to Cubans on the island. Before the pandemic, that cash totalled close to $4 billion a year — but has fallen 70% since then.
That’s mainly due to restrictions former President Trump put on those cash transfers from the U.S. to sanction Cuba’s dictatorship — which takes a cut of that money.
It’s not clear if Cuba thinks creating Orbit might persuade President Biden to ease those restrictions — mainly if the Cuban military controls Orbit, just as it ran the old Cuban money-transfer agency, Fincimex, which the U.S. has blocked.
“We still have the same question, which is: who controls Orbit?" said John Kavulich, who heads the U.S.-Cuba Trade and Economic Council in New York.
"What it does do is create a little bit of a discussion again on these U.S.-Cuba money issues.”
That is, a discussion about not only whether the U.S. should loosen Trump's measures on cash transfers to Cuba — but also take steps such as opening up direct U.S. investment in Cuba’s fledgling private businesses as well as the sort of direct U.S.-to-Cuba banking to facilitate it better.
“You’ve got U.S. companies that are saying, ‘Let us in to help these folks,’" said Kavulich. "But the Biden Administration has been sitting on a license application to allow direct investment in small and medium-size Cuban enterprises.”
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