2016-11-24 Thu

Think demonetization is confusing? Cuba has a dual currency system which means there are two officially accepted legal tenders!

Cuban Pesos (CUP) replaced the Spanish colonial real in 1857 and since then it was accepted as the legal tender in Cuba. But later on a new or second currency was introduced and the Cuban convertible Pesos (CUC) was also accepted as a legal tender since 1994.

Not confused yet? Here’s more :
The US dollar (USD) too was introduced as a legal tender until it was withdrawn from circulation in 2004!

But why did Cuba introduce dual currency?

Cuba started this dual currency system after the end of Cold war and in response to the Soviet Union breaking up. This step was taken to stir the country out of the economic depression and to facilitate the entry of Cuba into the global economy while being able to grow domestically.

While the Cuban convertible pesos (CUC) are pegged at par with the US dollar (USD), the Cuban Peso (CUP) is valued at a fixed exchange rate of 25 CUP = 1 USD. So the difference of value between the two Cuban currencies is like this:
1 Cuban Convertible Peso (CUC) = 25 Cuban Peso (CUP).

The Cuban Peso (CUP) is used in the domestic transactions and at government run hotels, restaurants and transportation, though the State-run institutions accept both. The workers too are paid in Cuban Peso (CUP) but the bonuses are paid Cuban convertible peso (CUC). The Cuban convertible Peso (CUC) is used to buy luxury items, food in tourist restaurants, and transportation or taxis.

How to identify the two?

Coins: The Cuban convertible Peso (CUC) has an octagonal frame within the circular rim of the coin, while the Cuban Peso (CUP) coins are totally round in shape. The CUC coins may also have a ($) dollar symbol or cent on it.

Notes: The CUC banknotes feature historic Cuban monuments whereas CUP banknotes feature famous Cuban personalities. The Cuban Convertible Pesos (CUC) bills have the word ‘CONVERTIBLES’ written on it.

Hope this was something totally refreshing and new to read!

Happy collecting fellas!