Cuban Peso (CUP)

What Is the Cuban Peso (CUP)?

The term Cuban peso (CUP) alludes to the official national currency of Cuba. Otherwise called moneda nacional, the Cuban peso is addressed by the symbols $ and $MN and by the code CUP on the foreign currency exchange market. Issued and kept up with by the Central Bank of Cuba, CUP was one of two currencies utilized on the island nation until 2021, the subsequent one being the Cuban convertible peso (CUC). Banknotes come in denominations that reach from $1 to $100. Coins are printed in values from one centavos to $3.

Understanding the Cuban Peso

As indicated above, CUP is the official national currency of Cuba. It was utilized related to the convertible peso in a dual currency system for commerce in the neighborhood economy, including the payment of employee salaries by employers. The convertible peso was principally implied for international transactions and forex purposes until the government decided to end its utilization in 2021.

The Cuban peso was first presented in 1857 when it replaced the Spanish real. The division into centavos started in 1869. One peso is made up of 100 centavos. Banknotes are imprinted in $1, $3, $5, $10, $20, $50, $100, $200, $500, and $1,000 denominations. CUP coins are stamped in values of one, two, five, 20, and 40 centavos. There are likewise $1 and $3 coins that are minted and circled.

Banco Central de Cuba or the Cuban Central Bank is the government authority that issues the national currency. Laid out in 1997, the bank is additionally responsible for monitoring the country's economy and carrying out monetary policy. It likewise drives Cuba's national banking system through nine commercial banks and a series of different institutions.

The currency was pegged to the U.S. dollar in 1881 yet switched to being linked to rubles in 1960. After the fall of the Soviet Union, the Cuban peso started to float uninhibitedly against different currencies before the presentation of the Cuban convertible peso (CUC).

You can't utilize debit or credit cards issued by U.S. banks in Cuba.

Special Considerations

Cubans were denied from utilizing the U.S. dollar for a long while. Be that as it may, the greenback turned out to be part of the country's currency circulation alongside the CUP when the country adopted the dual currency system, after the fall of the Soviet Union. The country was forced to open up to the travel industry due to the economic crisis that resulted at that point. Most Cuban organizations started accepting the greenback.

However, the country pulled out the U.S. dollar in counter for proceeded with American sanctions. The United States has had a trade embargo against Cuba that has been in place starting around 1961 and stays in effect to date. Efforts to restore relations between the two countries started in 2014 however have stalled once more.

History of the Cuban Peso

Cuba was a Spanish province for a very long time. Accordingly, the overarching currency utilized in the country during that time was the Spanish real. When Cuba acquired independence from Spanish rule in 1898, it turned into a republic in 1902.

However, the Cuban peso found its place in the island nation a couple of years sooner. It replaced the Spanish real as the country's official currency in 1857. At the hour of the switch, eight pesos were worth one real.

The country's economy is centrally planned. In that capacity, it is managed and run by the central government. The majority of Cubans work for the government, with unemployment coming to 2.8% in 2021. Gross domestic product (GDP) per capita added up to about $9,478 in 2020. Proceeded with economic flimsiness — especially in the wake of the global COVID-19 pandemic, U.S. sanctions, and a casual currency market — has driven the CUP to plunge in the foreign currency market.

Cuban Peso (CUP) versus Cuban Convertible Peso (CUC)

Cuba laid out a dual currency system when it started circulating the Cuban convertible peso in 1994. This currency was abbreviated as CUC and was additionally addressed with the symbols $ and $MN. Denominations in CUC were equivalent to in CUP for the two banknotes and coins.

While the peso was utilized for nearby commerce — to be specific, to purchase staples and non-luxury goods — the CUC was utilized for luxury goods and the travel industry, which is the reason it was called the travel industry dollar. The convertible peso was tied to the U.S. dollar and was generally traded and utilized by Americans in Cuba. It was pegged at par with the greenback.

The council of pastors in Cuba approved a plan in 2013 to bind together the two currencies. Plans were officially announced in 2020 to start the cycle in 2021. The interaction got loosened up into 2021 in view of the global COVID-19 pandemic. As of July 1, 2021, convertible pesos were not generally accepted by retailers and other commercial shippers.

Features

• CUP was one of two currencies utilized with the Cuban convertible peso until 2021 under Cuba's dual currency system.
• The currency is issued and kept up with by the country's central bank, Banco Central de Cuba.
• Its symbol is $ or $MN and is addressed on the currency exchange market as CUP.
• Banknotes come in denominations that reach in value from $1 to $1,000 while coins are stamped in value from one centavo to $3.
• The Cuban peso is the official national currency of Cuba.