What's the Alternative to elTOQUE's Exchange Rate in Cuba?

The recent exchange between independent media outlet elTOQUE and Carlos Miguel Pérez Reyes, president of the Mipyme Dofleini and a deputy in the National Assembly, has reignited a significant debate in Cuba's economy: Who truly determines the value of the dollar in a country where the state has failed to maintain a functional official exchange market?

The deputy accused elTOQUE of manipulating their reference rate through a methodology he described as "unreasonable," which relies on buying and selling intentions extracted from social media, supplier biases, and calculations that, in his words, any first-year engineering student could improve. In response, elTOQUE dismantled conceptual errors in these criticisms, particularly regarding statistical median, and defended the legitimacy of their model. However, focusing on this technical exchange diverts from the fundamental question at the heart of this debate: If elTOQUE's rate is so flawed, as the deputy claims, why isn't there a better alternative?

The answer is straightforward yet devastating: The Cuban state does not offer a credible alternative. In the absence of a functioning official market, elTOQUE's rate has become the de facto reference for thousands of Cubans, small business owners, private importers, businesses, and families. Not because it is perfect, but because it is the only available guide in a country where the official rate is neither adhered to, reflective of reality, nor backed by a real supply of dollars. This gap is both political and economic, rather than mathematical.

Limitations of elTOQUE's Methodology

Certainly, there are limitations to elTOQUE's rate that should not be overlooked. Its methodology is based on public ads and social media messages, meaning it measures declared intentions rather than actual transactions. In some instances, these ads originate from individuals keen on selling foreign currency at the highest possible price, introducing a clear supplier bias. Access to data depends on the reach of bots operating on specific platforms like Facebook, Telegram, and Revolico, which may not capture the entire market activity.

These are genuine flaws, and acknowledging them is part of analytical honesty. Yet, even with these limitations, elTOQUE's rate serves a crucial function because the state has effectively abandoned offering a reliable, transparent, and operational exchange system.

Why a Real Market is Unattainable in Cuba

In his response, the deputy outlined a more developed vision of what, in his opinion, a serious exchange market should entail: fintech platforms, electronic auctions, digital wallets, auditable statistics, and operations based on real transactions. On paper, it is a modern, sophisticated program perfectly in line with global trends.

The issue is implementing such a model is impossible in today's Cuba because the state lacks the necessary resources to sustain it. A functional official exchange market requires something fundamental: actual dollars. Dollars are needed to sell, to intervene if the rate skyrockets, to maintain convertibility, and for citizens to exchange CUP for foreign currency without uncertainty. The Cuban state does not possess these resources nor the capacity to generate them in the short term. Consequently, any officially announced rate without backing becomes an accounting fiction.

The Role of Trust and Control

Besides the lack of reserves, the state faces another critical obstacle: it no longer controls the foreign currency entering the country. For a long time, remittances were its main source of fresh dollars, but today less than 10% of these remittances go through official channels, according to figures acknowledged by the government itself. The remainder flows towards alternative operators, informal networks, and platforms operating outside the state system. For a government needing dollars to sustain its currency, losing control of these entries is tantamount to losing the central lever of exchange policy. No official market can function if the state is incapable of capturing the foreign currency circulating within its borders.

The problem, however, is not only about reserves; it is about trust. The Cuban population does not trust the state's financial institutions, a distrust built over decades of account freezes, abrupt restrictions, unannounced rule changes, arbitrary caps, excessive controls, and blocked transfers. Ironically, many citizens view the informal market as more predictable and stable than the official one. An economy can change with decrees, but trust cannot. As long as the state remains without credibility, no centralized exchange system will work.

Legalizing the Informal Market

There is, however, a solution that requires only political will, like almost everything in Cuba: The solution is not to replace the informal market nor absorb it into dysfunctional state structures. The smart and modern solution is to acknowledge its existence and legalize it. The informal foreign exchange market in Cuba functions, in practice, as a parallel financial sector operating with much greater efficiency, speed, and adaptability than the official system. Legalizing it doesn't mean handing economic power to clandestine networks; it means granting them licenses, allowing them to operate as financial companies, open bank accounts, declare operations, and subject themselves to transparent regulations.

The state has enough specialists, pollsters, economists, and statisticians to monitor real transactions and generate reliable data without resorting to police operations. It's not about absorbing the informal market or replacing it with a state version; it's about integrating it as what it already is: the space where the real value of currency in Cuba is formed.

The real issue isn't that the state doesn't control the informal market; it's that it insists on the fiction that it could still control it. As long as it continues attacking the symptoms—platforms, money changers, networks, operators—rather than addressing the structural causes—lack of reserves, lack of trust, lack of production, lack of monetary discipline—the dollar will keep rising and continue escaping to the mechanisms where the Cuban economy truly breathes.

The question, then, is not whether elTOQUE's rate is perfect. The question is what real alternative the state offers. And to this day, the answer remains none. In a country without a functional legal market, without a credible rate, without reserves, and without trust, the informal market will remain the only possible reference. Demonizing it won't make it disappear; it will only demonstrate, once again, the state's inability to govern the economy it claims to control.