Every country has its own version of the currency that its citizens use, and Cuba is no different.
What used to make Cuba unique to many other countries around the world was that it famously used to make use of two separate currencies.
But is this still the case? And if Cuba does use two different currencies, how does each differ from the other?
Today, we’re going to take a closer look at the currency of Cuba to help you better understand it.
We’ll take a brief look at how Cuba used to work with two currencies, and whether they still use this method today.
So let’s take a look at everything you need to know about the currency used in Cuba today and whether they still have two separate currencies!
What Is Cuba’s Currency Called?
The current currency used in Cuba is called the Cuban Peso (CUP). Some Cuban residents also use a digital currency which is called Moneda Libremente Convertible (MLC).
However, the vast majority of tourists will only need to use the Cuban Peso in order to spend money in Cuba.
Cuba famously used to use 2 currencies, with the Cuban Convertible Peso being the second type of currency used in Cuba.
This was removed on January 1st 2021, and now the country just uses the Cuban Peso as its main form of currency.
The Cuban Peso is available in a range of different notes, varying from quantities such as 1, 3, 5, and 10, and it can go all the way up to 500 Cuban Peso notes.
Depending on what notes you get when you exchange your country’s personal currency, it’s always best to try and carry some of the smaller notes around with you so that you have suitable bills for using on food stalls, buses, or when visiting flea markets.
Does Cuba Still Have Two Currencies?
No, Cuba doesn’t currently have two currencies. You would be correct in assuming that Cuba used to use two separate currencies, as this was the case.
However, back on January 1st 2021, the Cuban Convertible Peso was removed from circulation, and the Cuban Peso became the main currency of choice.
Cuba used this dual currency system for nearly thirty years, from when it was first introduced in 1994.
This all comes down to a long and complicated history of inflation causing the value of Cuban peso to drop before the introduction of the CUC.
Those who had American dollars to spend in Cuba did so, with those who were poorer and had no access to dollars still using the CUP. The CUC was introduced to mirror the value of the dollar.
However, with dual currencies in place in Cuba, this meant that people could only buy certain things if they only had one type of currency.
To try and solve economic problems caused by the pandemic in 2020, the dual currency was unified so that the Cuban Peso was the main currency of choice.
This is now the currency that is used throughout the country of Cuba, and is the currency that tourists will have to use.
Why Are There Two Currencies In Cuba?
Trying to work out the exchange rate between two currencies of separate countries is confusing enough. So why on earth would Cuba have chosen to have two separate currencies in its own country?
As we have briefly mentioned above, this all comes down to the economic history of Cuba. When the Soviet Union collapsed in 1991, this caused some economic difficulties for the country of Cuba.
The Cuban Peso was the main currency of choice at the time, and due to inflation, the value of this against the American dollar plummeted.
It was previously banned for those in Cuba to pay for things using American dollars. However after this economic crisis, these restrictions were removed, and those who had access to dollars used them.
In 1994, the Cuban Convertible Peso was introduced to be a match in value for the American dollar.
In 2004 the American dollar was no longer accepted in Cuba, meaning people had to rely on the CUC if they wanted to purchase items in certain stores.
However, because Cuba used two different types of currency, this also created a divide in the economy. The CUC remained in operation for around 27 years before it was finally removed at the start of 2021.
The Cuban Peso now remains as the only type of physical currency that is used in Cuba.
What Is The Difference Between Cuban Convertible Peso And Cuban Peso?
It’s no wonder people get confused if they’ve never been to Cuba before and weren’t aware that the country had two different currencies!
It will be confusing to understand how this works exactly if you’ve never visited Cuba before.
The main differences between these two different currencies are what they can be used for. If you have ever visited Cuba as a tourist, then you are likely more familiar with the CUC.
This is because this currency was mostly used in the tourism sector, and would be used to pay for things like hotels, buses, restaurants, and Cuban cigars.
CUC had a fixed equal value to the dollar, even though it could only be used on the island of Cuba itself. Tourists also used to be charged a 13% fee when exchanging dollars into the Cuban Convertible Peso.
The Cuban Pesos, however, was mostly used within the state sector. This created a monetary system that used two tiers, and also meant it was difficult to find equality between the two currencies.
It also made it tricky for the Cuban government to attract foreign trade.
Now that the currencies have been unified, the Cuban Peso is now used for everything in the country of Cuba. This makes things much simpler for tourists who are used to a single currency system.
This is a relatively recent change, and was mostly propelled by the Covid-19 pandemic when Cuba was forced to shut itself off from tourists.
So if you ever want to pay the delightful island of Cuba a visit, you will need to make sure that you exchange your home currency for Cuban Pesos.
So there you have it! You now know that until recent history, Cuba used to have two different currencies.
These were called the Cuban Peso (CUP) – the original currency that was used in Cuba – and the Cuban Convertible Peso (CUC) – which has recently been removed from circulation.
It may sound confusing, but the two types of currency were introduced to try and tackle economic strife within the country.
The CUC was introduced as a direct match in value to the American dollar.
After people started using dollars to pay for things, the Cuban government introduced the CUC so that they would be using a currency that was relevant to Cuba.
However, this introduced an economic divide to the people of Cuba.
On January 1st 2021 – also known as Day Zero – the CUC was removed from circulation, and the Cuban Peso once again became the only physical currency used in Cuba.