CUP - Cuban Peso

Introduction to Cuban Peso

The Cuban Peso is the official currency of Cuba, often referred to simply as the peso or moneda nacional (national currency). The issuing and managing authority of the Cuban Peso is the Central Bank of Cuba.

From the 16th to the 19th century, the peso circulated at par with the Spanish-American silver dollar. Later on, from 1881 to 1959, it was pegged to the U.S. dollar before being linked to the Soviet ruble during the Cold War period.

In 1991, after the collapse of the Soviet Union, Cuba experienced economic hardship known as the “Special Period.”

From 1994 to 2020, the Cuban peso circulated alongside the Cuban Convertible Peso (CUC), which was pegged to the U.S. dollar. However, as of January 1, 2021, Cuba implemented a currency unification policy, discontinuing the CUC and setting an official exchange rate of 24 CUP/USD, making the CUP the only legal tender in the country.

History of the Cuban Peso CUC

The Cuban Peso has undergone a long historical and developmental process, specifically:

Before 1994

• Before 1857, Spanish reales and Spanish colonial currency circulated in Cuba. These bills were valued at par with the peso, with 1 peso = 8 reales.

• From 1869, decimal banknotes were issued with denominations in centavos, where 1 peso = 100 centavos.

• In 1881, the peso was pegged to the U.S. dollar at a 1:1 exchange rate. In 1915, the first coins were issued.

• In 1960, after the United States imposed an embargo on Cuba, the peso devalued. The Cuban peso was then pegged to the Soviet ruble when the Soviet Union became Cuba’s new economic partner. Before 1961, the exchange rate was 1 CUP = 1 USD = 4 old rubles, and then adjusted to 1 CUP = 1 USD = 0.90 new rubles.

• During this period, foreign exchange was a government monopoly, and citizens could not purchase it using Cuban pesos.

The CUP and CUC Period (1994 - 2020)

• 1991: The collapse of the Soviet Union led to Cuba’s economically challenging “Special Period.”

• 1993: The U.S. dollar became legal tender, and the Cuban peso lost much of its value, with the market exchange rate dropping to 125 CUP/USD.

• 1994: The Cuban Convertible Peso (CUC) was introduced, pegged to the U.S. dollar and circulating alongside it. Partial economic recovery stabilized the CUP at approximately 23-25 CUP against the CUC or USD. A fixed rate of 1 USD = 1 CUC = 25 CUP was used from 2004-2005 and again from 2011-2020 via Cadecas.

• 2004: The CUC became legal tender, replacing the USD, with its value pegged to the dollar.

• 2004-2005: A 10% fee or tax was applied when exchanging USD to CUC.

• Economic recovery after the Special Period in 2000 aided the restoration of socialist-planned economic characteristics.

• In October 2013, Cuba announced the phasing out of the CUC and the gradual elimination of its dual exchange system. Many businesses began accepting both CUP and CUC, with an exchange rate of 1 CUC = 25 CUP. High-denomination banknotes, like 200, 500, and 1000 CUP, were also introduced.

2021 Currency Unification

• On December 10, 2020, the “Zero Day” for currency unification was announced, effective from January 1, 2021. A single exchange rate of 1 USD = 24 CUP was applied. The Convertible Peso (CUC) was officially eliminated.

Inflation

• In 2021, due to a foreign currency shortage, Cuban businesses and individuals found it difficult to exchange CUP for hard currency at the official rate of 1 USD = 24 CUP. Demand for foreign currency led to a black market, where 1 USD equaled 100 CUP as of January 2022.

• By October 2022, 1 USD was equivalent to 200 CUP.

• In February 2024, 1 USD reached an exchange rate of 300 CUP.

Denominations of the Cuban Peso (CUP)

The Cuban Peso is currently circulated in both coins and banknotes with the following denominations:

• Banknotes: 1, 3, 5, 10, 50, 100, 200, 1000, and 10,000 CUP.

• Coins: 1¢, 2¢, 5¢, 20¢, $1, $3, $5.

The Cuban Peso (CUP) Exchange Rate System

Since January 1, 2021, the Central Bank of Cuba has maintained a fixed exchange rate policy for the Cuban Peso (CUP), setting it at 1 USD = 24 CUP. This policy aims to stabilize the currency amidst economic challenges, control inflation, and promote economic growth in Cuba.

History of the Cuban Peso (CUP) Exchange Rate

• Before 1959: The peso was pegged to the U.S. dollar.

• 1959–1991: Following the revolution, Cuba adopted a socialist planned economy, and the peso was pegged to the Soviet ruble, reflecting Cuba's close economic ties with the USSR.

• 1994–2020: The Cuban peso circulated alongside the Cuban Convertible Peso (CUC), with a rate of 1 CUC = 25 CUP for citizens and 1 CUP = 1 CUC for state enterprises.

• Since January 1, 2021: Currency unification eliminated the CUC, and a fixed rate of 1 USD = 24 CUP applies to all transactions.

Cuba’s current policy aims to simplify currency use and stabilize the Cuban Peso in a challenging global economic environment, with goals of managing inflation and improving the balance of payments.

To check the latest CUP exchange rates, you can use the currency converter at Gocuco!