Historical Sketch

Christopher Columbus discovered the island for the Europeans on his first voyage in 1492 and named it Juana or Fernandina. Spain took formal possession in 1511 and made it part of the Santo Domingo colony. In 1777, a separate Captaincy General was established within the Viceroyalty of New Spain. In 1868, Cuba unilaterally declared independence Republic of Cuba "in arms", which led to a 10-years war of independence that was finally lost. A second war of independence broke out in 1895 during which the United States interfered and took over Cuba from Spain in early 1899. Independence was attained in 1902 but Cuba remained under US protectorate until 1934. In 1959, the Cuban government was overthrown by Communist insurrection, and two years later, Socialism was formally adopted.

Monetary History Overview

The Spanish colonial monetary system was introduced in Cuba together with Spanish colonization, but no local mint was ever established on the island. In 1841 the Royal Treasury adopted a new gold-to-silver ratio and thus created the Cuban Peso as a pure unit of account, still without intention to mint local coins. The first Cuban money consisted of the notes of the Spanish Bank in Havana that was established in 1857 as commercial bank with 25 years' privilege that included the right to issue paper money. The banknotes were nominally backed by silver but over-issuance during the war of the 1870s turned it inconvertible. In a banking crisis of the 1880, the notes of the now called Spanish Bank of Cuba further depreciated against specie. In 1892 finally, the devalued paper money was withdrawn, leaving Cuba with Spanish and French gold coins as primary circulating medium. The US administration introduced the US Dollar as unit of account instead of the Peso in 1899. The Spanish and French coins remained current and circulated alongside US coins and notes. Independence in 1902 did not immediately change the monetary system. Cuba adopted a currency law in 1914 for the issuance of national gold and subsidiary coinage. The 2nd Cuban Peso was on par with the US Dollar, and US coins and paper money remained legal tender. In a currency crisis of 1934, the Cuban gold coins were withdrawn and the government began issuing silver certificates, the first Cuban paper money after independence. In 1950, the Cuban central bank began operations. Regular paper money was issued, and the US American currency was demonetized until mid-1951. The socialist revolution of 1959 did not change the monetary order, although the convertibility of the Peso got more and more restricted. The Dollar devaluations of 1971 and 1973 were not followed such that the Peso nominally appreciated. In the 1976, the Peso was unpegged, and the official rate appreciated further until 1994, when nominal parity was re-established. Since the 1980s, the Cuban government gradually introduced a parallel currency regime to cope with the inflow of US currency that competed with the national currency pegged at an artificially high exchange rate. In 1985, a system of exchange certificates was created where foreign visitors and residents could exchange hard currencies against Central Bank certificates for buying goods in specially designed facilities. The subsidiary coins were issued by the National Tourism Institute INTUR and therefore referred to as "visitors' currency". In 1995, the certificate system was abolished and replaced by a separate parallel currency called "Convertible Peso" that was issued by the central bank. Both the "national" and "convertible" currency were on par with the US Dollar but not mutually exchangeable and could be used for payments in separate parts of the economy. The dual currency regime was abandoned in early 2021. The "national" currency was devalued by a factor of 24 to accommodate with the parallel market rate and became convertible against hard currencies. The notes and coins of the "Convertible Peso", as well as the remaining INTUR certificates and coins, were demonetized until mid-2021. The peg of the Peso to the US Dollar has remained unchanged since then.

Cuba joined the International Monetary Fund (IMF) on 14.03.1946. After the communist revolution of 1959 and the following US embargoes, Cuba exited the IMF on 02.04.1964 and has not re-joined since.

Currency Units Timeline

Currency Institutes Timeline

Monetary History Sources

  • J.C. Mascaros: "La moneda y la banca en Cuba desde el descubrimiento hasta el Crac de 1920" in "Revista del Banco Central de Cuba", 3/1999
  • J.A. Perez Martinez: "Souvenirs de 1897 y el peso de 1898" in "Revista del Banco Central de Cuba", 4/2005
  • J.A. Perez Martinez: "¿Billetes emitidos en 1905 por el Banco Nacional de Cuba?" in "Revista del Banco Central de Cuba", 3/2006
  • I. Roldán de Montaud: "La banca de emisión en Cuba (1856-1898)" in "Estudios de historia económica" no. 44-2004
  • (ano): "La onza de oro en Cuba" by "Museo numismático del Banco Central de Cuba"