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After several months of relative stability in its informal exchange rate, the MLC has experienced a drastic increase in its value in Cuba in recent days, although there have been occasional declines.
An article published by elTOQUE this Thursday seeks to explain why the beleaguered Freely Convertible Currency (MLC) has once again become a topic of public debate in recent weeks.
Although there was a drop of five pesos compared to the previous day, according to elTOQUE, on this December 11, the MLC is being sold at an average of 290 CUP in the informal market.
The figure represents an increase of more than 30% compared to its value at the beginning of November, when it was around 205 CUP.
This abrupt rise has once again placed the MLC at the center of the national economic debate.
Is it just a simple bubble, or are we witnessing a symptom of deeper tensions in the Cuban monetary system?
The pressure on the dollar and the temporary role of the MLC
The economist Pavel Vidal, researcher at the Cuban Currency and Finance Observatory (OMFi), provides a structural analysis of the phenomenon.
"MLC could be serving as a temporary option that the private sector has found to cover some of its financial operations that were previously conducted in dollars, which would explain an increase in its demand and price," says Vidal, quoted in the article published on December 11 on the website of elTOQUE.
According to the cited source, the recent police pressure on remittance senders and operators of the informal currency market has reduced the circulation of US dollars (USD) and has contributed to the increase in prices of all currencies.
In that context, the MLC has reemerged as a functional alternative, especially for the imports of small and medium-sized enterprises through state-owned companies, a practice that still persists despite the limitations of convertibility.
But in addition to its direct use, the MLC is being influenced by market expectations.
According to Vidal:
"It is likely that the value of the MLC will continue to adjust to the expectations regarding its future (...) because [market participants] anticipate that this currency will benefit in its exchange rate and/or utility value as part of the upcoming transformations in the Cuban foreign exchange market."
A new cycle like the CUC?: Dollarization and mistrust
The situation reminds many Cubans of the process of the disappearance of the CUC.
The MLC, like that currency back then, is beginning to show signs of institutional wear: its utility decreases, it loses real backing, and its future is perceived as uncertain.
A sign in that direction has been the opening of more stores that sell exclusively in cash dollars, ceasing to accept MLC.
However, this exclusion does not eliminate the demand:
"Paradoxically, this perception does not always reduce demand, as many users choose to buy MLC for immediate transactions, fearing an even greater drop in its value", notes the analysis from elTOQUE.
At the same time, the dollarization of the Cuban economy is accelerating and is even officially acknowledged in the new Government Program to correct distortions.
Two possible scenarios for the future of the MLC
Pavel Vidal outlines two main paths for the MLC destination once the government progresses with its promised reforms for the currency market:
1. Definitive disappearance (like the CUC)
In this scenario, the State would choose to completely eliminate the MLC.
"It may be that they bury it definitively (as they did with the CUC) or that they try to revive it by promoting its convertibility to Cuban pesos with a more competitive official exchange rate," notes Vidal.
Since there are no physical MLC bills, the process would be simpler:
"It would involve converting all MLC accounts, debts, and prices currently accounted for in that currency into Cuban pesos, using the value of the floating exchange rate, which is expected to be close to the informal market rate," he explained.
This would imply that what remains of trade in MLC would be transferred to CUP at very high rates.
For example:
"If this rate were used, what little is left of the stores in MLC would start to be sold in pesos multiplied by 400, for example; and workers who receive income in MLC would have their salary multiplied by this rate and would be paid in pesos."
This path would further strengthen the private sector's preference for operating in dollars.
Reconfiguration within a dollarized banking system
In a second option, the government could partially revive the MLC within a more flexible and banked exchange system, with an official floating rate:
"If this measure is implemented, it is possible that bank-based currency exchange transactions will be enabled, in addition to cash transactions conducted over the counter," Vidal anticipates.
This would allow, for example:
-Convert remittances to CUP at the floating official rate.
-Top up prepaid cards in CUP using received dollars.
Using MLC as an intermediary currency in the sale of foreign currencies by banks.
"That would be the mechanism to buy dollars through banking channels," Vidal illustrates.
"If the new official exchange scheme includes banking operations, the MLC could have a place in that system," he added.
However, this second approach faces a crucial obstacle: the loss of credibility of the MLC.
"However, this path would have many obstacles, given the strong discredit that this currency carries. Despite the recent appreciation, in the informal market, the MLC is worth about 40% less than the US dollar," concludes the analyst.
A volatile and fragile market
As has happened on previous occasions, the informal Cuban market responds extremely sensitively to rumors, temporary shortages, police actions, or government announcements.
What happened with the MLC in November and December 2025 is proof that the monetary system remains vulnerable and unstable.
The rise of the MLC is not merely a temporary issue: it reflects the confusion and structural gaps in the Cuban economic system, the expectations surrounding pending reforms, and the lack of clarity regarding the fate of the currencies in circulation.
Meanwhile, the population and entrepreneurs are trying to adapt, operate, and survive in an uncertain environment.
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