Economy of Cuba
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The Cuban peso (CUP), aka the [[Cuban peso|national peso]], is the official currency of Cuba issued by the Central Bank of Cuba. It replaced the Spanish real in 1857.{{cite web |last1=Chen |first1=James |title=What Is the Cuban Peso (CUP)? History and Currency Insight |url=https://www.investopedia.com/terms/c/cup.asp |website=Investopedia |access-date=14 April 2026 |date=22 December 2025}} |
The Cuban peso (CUP), aka the [[Cuban peso|national peso]], is the official currency of Cuba issued by the Central Bank of Cuba. It replaced the Spanish real in 1857.{{cite web |last1=Chen |first1=James |title=What Is the Cuban Peso (CUP)? History and Currency Insight |url=https://www.investopedia.com/terms/c/cup.asp |website=Investopedia |access-date=14 April 2026 |date=22 December 2025}} |
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In 1994, after the fall of the Soviet Union, Cuba suffered a loss of aid from the socialist bloc (which bought Cuban sugar for above market rates and sold Cuba petroleum for below market rate){{cite web |title=The Special Period |url=https://cubaplatform.org/special-period |website=The Cuba Platform |access-date=18 April 2026 |date=2020}} and markets for its exports. The value of its currency fell from approximately five pesos to the US Dollar to 100 to the dollar.{{cite journal |last1=Vidal Alejandro |first1=Pavel |last2=González-Corzo |first2=Mario A. |title=A Synopsis of the Dual Currency System in Cuba |journal=International Journal of Cuban Studies |date=Spring 2011 |volume= |
In 1994, after the fall of the Soviet Union, Cuba suffered a loss of aid from the socialist bloc (which bought Cuban sugar for above market rates and sold Cuba petroleum for below market rate){{cite web |title=The Special Period |url=https://cubaplatform.org/special-period |website=The Cuba Platform |access-date=18 April 2026 |date=2020}} and markets for its exports. The value of its currency fell from approximately five pesos to the US Dollar to 100 to the dollar.{{cite journal |last1=Vidal Alejandro |first1=Pavel |last2=González-Corzo |first2=Mario A. |title=A Synopsis of the Dual Currency System in Cuba |journal=International Journal of Cuban Studies |date=Spring 2011 | volume=3 |issue=1 |page=45 |jstor=41945927 |url=https://www.jstor.org/stable/41945927?seq=1 |access-date=16 April 2026}} |
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To deal with this Cuba legalized the possession and use of U.S. dollars (which had become "the preferred means of payment for non-state sponsored activities"), and adopted a dual currency system -- the [[Cuban peso|national peso]] (or CUP) and the [[Cuban convertible peso|convertible peso]] (or CUC) -- a situation that lasted for over a quarter of a century. These policies were intended to curb hyperinflation and "regain monetary stability", but also "hindered potential economic growth and produced unfavourable economic effects and incentives", such as highly skilled workers in the state sector (e.g. professors and physicians), leaving their jobs to gain access to hard currency and thus much higher pay in the tourist industry.{{cite journal |last1=Vidal Alejandro |first1=Pavel |last2=González-Corzo |first2=Mario A. |title=A Synopsis of the Dual Currency System in Cuba |journal=International Journal of Cuban Studies |date=Spring 2011 |volume=2 |issue=3/4 |pages=43,46 |jstor=41945927 |url=https://www.jstor.org/stable/41945927?seq=1 |access-date=16 April 2026}} The CUP was intended for local commerce—i.e., to purchase staples and non-luxury and most non-imported goods goods. The CUC aka the tourism dollar, was tied to the U.S. dollar and to be used for imported/luxury goods and tourism (as was the U.S. dollar). |
To deal with this Cuba legalized the possession and use of U.S. dollars (which had become "the preferred means of payment for non-state sponsored activities"), and adopted a dual currency system -- the [[Cuban peso|national peso]] (or CUP) and the [[Cuban convertible peso|convertible peso]] (or CUC) -- a situation that lasted for over a quarter of a century. These policies were intended to curb hyperinflation and "regain monetary stability", but also "hindered potential economic growth and produced unfavourable economic effects and incentives", such as highly skilled workers in the state sector (e.g. professors and physicians), leaving their jobs to gain access to hard currency and thus much higher pay in the tourist industry.{{cite journal |last1=Vidal Alejandro |first1=Pavel |last2=González-Corzo |first2=Mario A. |title=A Synopsis of the Dual Currency System in Cuba |journal=International Journal of Cuban Studies |date=Spring 2011 |volume=2 |issue=3/4 |pages=43,46 |jstor=41945927 |url=https://www.jstor.org/stable/41945927?seq=1 |access-date=16 April 2026}} The CUP was intended for local commerce—i.e., to purchase staples and non-luxury and most non-imported goods goods. The CUC aka the tourism dollar, was tied to the U.S. dollar and to be used for imported/luxury goods and tourism (as was the U.S. dollar). |
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