What’s the deal with Cuban money and the island’s two circulating currencies? Should you use CUC or CUP? What’s the difference between the two? Why are both called Cuban pesos indistinctively when they are not the same and you can’t buy the same things with one or the other? Here, we get past the jargon to help you navigate the island’s dual currency system and spend your money wisely during your Cuba holiday.
One of the first things anyone does when booking a holiday somewhere abroad is find out about the local currency, check exchange rate values and see how best to obtain foreign currency to use during their trip. In the case of Cuba, this process is slightly more complicated and can prove really confusing for first-time travellers. Why? Cuba has two currencies in circulation and knowing which one to use when requires prior knowledge of how they work, which is what this blog is really about, so keep reading for the full low-down!
What’s Cuba’s national currency?
CUP – the original currency
Cuba’s national currency is the Cuban Peso. It has been so since 1857 when Cuban peso banknotes were first issued to replace the Spanish reales (Cuba was a Spanish colony until 1898). In 1881 Cuban Pesos were pegged to the dollar at par and remained thus until the triumph of Fidel Castro’s revolution. In 1960, the peso was pegged to the Russian ruble during the Soviet era, after which it rapidly lost value due to the U.S. embargo against Cuba in the decades that would follow.
This little background in the history of Cuban money and the Cuban peso is necessary to understand how Cuba came to eventually adopt a second currency during the Special Period (the island’s worst economic crisis after the collapse of the Soviet Union) when the Cuban peso had fallen to all-time lows, with the rate being 125 Cuban pesos to the U.S. dollars In recent times, it has gained in value and now fluctuates between 23 and 25 Cuban pesos to the American dollar.
The introduction of CUC
So, Cuban Pesos (CUP) are the official coin and the currency in which the vast majority of Cubans are paid in but there is another currency that circulates in parallel (posing quite the paradigm) and that is the Cuban Convertible Peso (abbreviated as CUC).
First launched in 1994 (almost at the same time as the term “casa particular” was coined) as a local equivalent of the U.S. dollar (it was the government’s answer to the financial crisis – to allow hard currency to enter Cuba’s fragile economy), the Cuban Convertible Peso was one of the ways that Cuban authorities saw as an opportunity to get the economy afloat (together with opening up the tourism industry).
The new Cuban money (CUC) would allow citizens to purchase non-essential goods (like cosmetics, electric appliances, furniture and so on) as well as non-rationed food in special CUC-only shops that distinguished themselves from the state-run “bodegas” that sold a very limited (and increasingly diminishing) amount of goods (mostly food) at subsidised prices via a ration book (locally known as “la libreta”).
CUC and CUP today
Nowadays, CUC and CUP circulate at parallel, and CUC dominates the Cuban economy for most transactions, to the point that Cubans are beginning to get paid a percentage of their salary (albeit a small one) in CUC. Those employed by the government continue to receive the majority of their salary in CUP, while some Cuban entrepreneurs get paid exclusively in CUC and others accept either of the two.
CUC or CUP? Which ones to use for what?
To put things plainly, CUC is the highest value currency and the one that tourists are requested to pay in when making financial transactions in Cuba. That’s not to say that, as a tourist, you aren’t allowed to obtain or use CUP, but it will be trickier and we can’t guarantee much success. That said, we can give you tips on how to get CUP to spend them on things like street churros, pizzas and peanuts (unfortunately, there’s not much else you can buy with CUP or “moneda nacional”, even less if you’re tourist).
Places where you CAN’T use CUP in Cuba
As a tourist you can only pay for things like hotels, stays in casas particulares, restaurants (private or state-owned), taxi rides, tours and excursions using CUC. The Cuban government won’t accept any form of CUP payment from non-Cubans. For foreigners, the Cuban money requested is strictly CUC-only.
When it comes to Cuban entrepreneurs and their businesses (shops, restaurants, bars, taxis, food or drink stalls, etc.)
and how they deal with transactions from foreigners, there´s a bit more flexibility, but only from some kind of businesses. Allow us to explain.
Generally speaking, the majority of Cuban entrepreneurs will demand to be paid in CUC only, but not just from tourists, from anyone. Cubans pay many Cuban entrepreneurs in CUC as the prices quoted in menus, room rates, bars, and private shops will always be in CUC.
Also generally speaking, Cubans prefer to be paid in CUC, and when they see you´re a tourist (yes, they can tell 99% of the time), even if they advertise their prices in CUP (commonly spelled out as “Moneda Nacional” – which stands for “national coin”), they might demand that you pay in CUC given you´re a foreigner. In this case, keep the exchange rate in mind to avoid getting short-changed.
Where in Cuba can you use CUP then?
Things like public transport, outdoor vegetable markets (a.k.a. “agros” in the local lingo), street food vendors, small
privately-owned cafeterias that sell sandwiches, pizzas, coffee, freshly-squeezed juices and ice cream from the owner´s house´s front door, window or patios, will always have price lists in CUP. Street vendors selling peanuts, popcorn, churros or any other form of snack will quote you in CUP, although if they see you´re a tourist they might cheekily quote you the same price in CUC (without accounting for the exchange rate. Not all will, however and might give you the correct equivalent in CUC. All upon seeing you´re a tourist will assume you won´t have Cuban pesos with you, and only the convertible kind
Where in Cuba can you use CUC?
The answer to this is an easy one – virtually anywhere! Even Cubans who charge in “moneda nacional” (CUP) will gladly accept the equivalent of the price quoted in CUC (for example if your Cuban pizza costs 15 CUP, they´ll accept the equivalent of 60 cents in CUC coins).
What may prove trickier is when it´s the other way around when you want to pay in CUP for prices advertised in “moneda nacional” for Cubans and with you being a tourist the assumption being you should pay in CUC.
Why some Cubans don’t like being paid in CUP by foreigners
Because goods (typically food) advertised in CUP are far cheaper and more accessible to Cubans with their low wages than those sold in CUC, the fact that you´re a tourist with more disposable income trying to pay in CUP might be perceived as taking unfair advantage when you can clearly afford to pay more because everything in Cuba geared to tourism is priced in CUC.
How do you know which establishments accept payment in CUP?
To distinguish between CUC or CUP, local vendors will write “moneda nacional” or abbreviate as CUP. Another way to tell whether the price advertised is in CUP or CUC is to check whether the sign $ has one or two strikethroughs. One typically indicates CUP while two is used to represent CUC. Given that the term Cuban peso is used indistinctively for both currencies it won’t be much help if they tell you, if it´s not spelled out on the price board, you’ll have to ask.
Can I pay in U.S. dollars in Cuba?
Not anymore. On November 2004 the Cuban government withdrew U.S. dollars from circulation and its use was banned, all in retaliation to further U.S. sanctions. You can, by all means carry U.S. dollars with you in Cuba and you can exchange them for CUC at banks and Cadecas (subject to a 10 per cent fee), but you will not be able to buy anything with them on the island.
How to get Cuban money?
Getting Cuban money is easy in theory, but banks and CADECA kiosks (the best places to exchange money) are not that easy to come by, there are a few and far between.
That said you can exchange money at virtually any hotel desk, even when you´ll get the best rates at the bank and the CADECA kiosks.
When it comes to how to get Cuban money or the currency exchange process, if it´s CUC you´re after (it´s the currency banks and exchange bureaus will assume you want and the one they´ll give you unless you tell them otherwise) you´ll need to show your passport. Remember that if you bring U.S. dollars, they´ll charge you a penalising 10% fee (Cuba´s retaliation against American sanctions). Not so the case for British Sterling or Euro.
If you want to get your hands on CUP notes and coins you’ll have to ask at the bank when exchanging money (hotels will only give you CUC) but seeing you´re a tourist they might be suspicious and refuse to exchange “moneda nacional”. A good and better alternative would be to exchange with a trustworthy local, like your casa particular host, who will be happy to give you some CUP as well as tips on where to spend them.
If you´ve got more questions about Cuban money, getting it, exchanging it or spending it, feel free to leave a comment and we’ll get back to you as soon as possible to answer your concerns.