From a Strong Peso to the 20,000 Bill: A History of Monetary Destruction in Cuba

The introduction of the new 10,000 and 20,000 Cuban peso bills on September 16, 2026, serves as a printed acknowledgment of the severity of inflation. The first bill features the image of Haydée Santamaría, while the second one depicts Vilma Espín. Just six months prior, the 2,000 and 5,000 peso bills had been introduced. The Central Bank claims that the new denominations will facilitate transactions and reduce cash handling costs. However, when a country needs to rapidly increase the face value of its currency, what it is really showing is how much purchasing power its money has lost.

In 1959, the Cuban peso maintained a virtual real parity with the US dollar. The existing bills, issued by the National Bank of Cuba, circulated in denominations that went up to 100 pesos. However, in August 1961, the new regime executed a surprise currency exchange through laws 963 and 964. The previous bills became invalid and were replaced by a new series, secretly printed in Czechoslovakia and signed by Ernesto “Che” Guevara.

Each family was able to exchange only 200 pesos immediately. Larger amounts were deposited into special accounts, subject to withdrawal limits, while any money exceeding certain caps could become non-redeemable. Of an estimated 1.187 billion pesos in circulation, only 724 million were exchanged. This operation allowed the new regime to seize a significant portion of the monetary wealth accumulated by the population and establish absolute control over national finances. The new bills started with denominations of 1, 5, 10, 20, 50, and 100 pesos; later, a three-peso bill featuring the image of Ernesto Guevara was introduced.

In the following decades, the illusion that one Cuban peso equaled one dollar was artificially maintained. The economy, supported by Soviet subsidies, operated with administrated prices, state-set wages, rationing, and strict currency controls. The apparent stability did not stem from productivity but from foreign subsidies and monetary repression.

The unauthorized possession of dollars and other currencies was criminalized. Thousands of Cubans were registered, interrogated, fined, or imprisoned for holding or exchanging foreign currency. The Penal Code deemed it a crime to possess foreign currency without authorization, to engage in transactions with it, or to conduct currency exchanges outside state institutions. Even after the legalization of ownership, informal buying and selling continued to be prosecuted and could be punished with fines and prison sentences.

The collapse of the Soviet Union exposed the fragility of the system. Between 1990 and 1993, the Cuban economy experienced a contraction of over 30%, there was a rampant increase in money without productive backing, and suppressed inflation erupted in the informal market. Economic studies estimate that inflation reached 183% in 1993 and averaged around 77% annually between 1990 and 1993. The dollar, which officially continued to feign an absurd equivalence, reached approximately 80 pesos by the end of 1993 and climbed to 120 pesos in 1994.

In response to the desperate need to capture remittances, the regime enacted Decree-Law 140 in August 1993, which decriminalized the possession of dollars. Currency collection stores were opened, leading to a divided economy: those receiving dollars could purchase food and products that were inaccessible to those relying solely on a state salary.

In 1994, the convertible peso, or CUC, was introduced. For years, the CUP, the CUC, and the dollar coexisted. In 2004, the government once again prohibited the use of cash dollars in commercial establishments and replaced them with the CUC, also imposing a 10% tax on dollar exchanges. Officially, one CUC was equivalent to one dollar and 24 national pesos for the public, while for state accounts, the fiction of one CUP equaling one dollar was maintained for years.

In 2015, 200, 500, and 1,000 peso bills were introduced. This foreshadowed the loss of value that would come later. In 2019 and 2020, stores accepting freely convertible currency reemerged, where payments are made using cards backed by foreign currency. The state resumed selling essential products in dollars or equivalents, while miserably low wages continued to be paid in pesos.

On January 1, 2021, the so-called Ordering Task began. The CUC was eliminated, and an official exchange rate of 24 pesos per dollar was established. The reform multiplied salaries, pensions, rates, and prices, but it did so without increasing production. The result was a devaluation of 2,300%, triple-digit inflation, loss of savings, and widespread impoverishment. In 2022, another official rate of 120 pesos per dollar was created, while the informal market continued to advance: around 170 pesos in 2022, more than 250 in 2023, about 320 in March 2024; 400 in 2025, and 500 in February 2026. Today it is traded at 700 CUP. This street market, operated through personal contacts, WhatsApp, and social media, best reflects the real value of the peso. 

Until March 2026, the most commonly used bills for major purchases were the 500 and 1,000 pesos. After that, the 2,000 and 5,000 bills began to gain popularity. Now, the 10,000 and 20,000 bills will ultimately replace them in large transactions. The 20,000 bill represents twenty times the value of the highest denomination available at the beginning of 2026, and yet it barely suffices for a modest grocery purchase.

The so-called banking system began to be enforced more strongly in August 2023 through Resolution 111 of the Central Bank. Cash payments were limited, and applications like Transfermóvil, EnZona, QR codes, cards, and point-of-sale terminals were promoted. Digitalization could reduce costs, facilitate transfers, and provide a record of transactions. However, in Cuba, it faces challenges such as power outages, poor connectivity, a shortage of phones, few terminals, malfunctioning ATMs, lack of cash, fees, technological errors, and distrust in institutions. In 2026, the Government had to relax restrictions, including the removal of the strict limit of 5,000 pesos for specific cash operations.

The monetary history of these 67 years is a story of controls, prohibitions, parallel currencies, fictitious rates, confiscations, improvisations, and devaluations. No higher denomination bill will resolve the lack of production or restore value to wages. Money, inflation, purchasing power, pensions, and salaries can only improve sustainably when Cuba has reliable institutions, protected property, economic freedom, transparency, and a true democratic state.