Up to 1934, when peso bills were first introduced, the US dollar was Cuba's only type of currency.
In August 1993 the US dollar became the currency of Cuba again. Increasingly the US dollar was used for transactions. It is estimated that around 50 percent of the Cuban population used the US dollars at one time. Most resort facilities, hotels, restaurants and other places dealing with foreigners would only accept dollars.
In 1994 the convertible peso or CUC, as it is sometimes referred to, was introduced.
On November 8, 2004 the Cuban authorities eliminated the circulation of dollars and any other "convertible currency" in all the country. Additionally, the Cuban Central Bank (BCC) resolution established that from that date onward, the exchange of US dollars for Convertible Pesos or CUC will have a 10 per cent tax. The measure was applied to nationals and foreign visitors in stores, hotels, bars, cafeterias, taxis, rent-a-car companies and any other business that used to accept cash payments in US dollars.
Currently, there are two currencies in Cuba and if you wish to obtain best value for money, you should acquire both. The major legal currency for Cuba is the Cuban Convertible Peso, CUC or “cook” as it is pronounced. It’s what you exchange your foreign currency for and make all your purchases with in Cuba. Most tourists will only ever deal with CUC.
For international exchange purposes 1.00 Cuban Convertible Peso = $1.00 USD. However, there is a 10 percent penalty charged when exchanging USA dollars cash, so, you will only receive 87 centavos CUC for one USA dollar when changing the money, allowing for the 10 percent penalty and a 3 percent currency exchange fee. NOTE: If you have good contacts you can end up getting 90 to 95 CUCs per dollar.
CUCs are available in the following denominations and multicolored bills: 1, 3, 5, 10, 50, and 100 peso notes, together with 1, 5, 10, 25, and 50 centavo coins.
Havana has said it would eliminate the 10 percent penalty altogether once international banks allow the country to carry out international transactions in dollars. The good news is that the Cuban government announced recently that it will eliminate its 10 percent tax on the use of the US dollar on the island. However, only but only if new U.S. banking measures allow improved Cuban access to the international banking syste. The decision should enter into effect as soon as US authorities allow Cuban state institutions to use the dollar in transactions in the United States, Many Cubans in Cuba receive dollar remittances from relatives or friends in the United States, and were the most hurt by the measure.
Here is the ONLY website that gives you the exact exchange rates that you will receive at the Bank in Cuba is (www.bc.gob.cu)
The Cuban peso or CUP is the official currency of the country, state salaries are paid in pesos and it is what the citizens use in their daily trading. Anything a local will require such as cheap food and drink, market foods, local buses and collectivo taxis will be sold in pesos. The Cuban peso is divided into 100 centavos or cents. The following multicolored bills are in circulation: 1 peso, 2 pesos, 5 pesos, 10 pesos, 20 pesos and 50 pesos. The Cuban peso is further divided into 100 centavos called pesetas. The most common coins, or monedas, are: 1 peso, 40 centavos, 20 centavos, 10 centavos and 5 centavos 2 and 1 centavos. It is a good idea to have a supply of 5 centavo coins if you plan to use buses or pay phones or to buy food.
Cuban slang is used when referring to certain types of money being circulated. These terms can be confusing for someone who is not familiar with them: baro - dollars, divisas - dollars, fula - dollars, un medio - five cents or centavos, kilos - cents or centavos, moneda nacional - pesos or national currency, moneda efectivo - dollars and una peseta - twenty cents or centavos.
Cadecas, government-run currency shops are the only legal way, along with banks, to swap your foreign money for Cuban currency. Cadecas are located at airports, many resorts and hotels and at locations all over the Island. The most popular and largest Cadeca in your is in down Obispo Street # 257, a very popular pedestrian only thoroughfare that heads into Old Havana.
Foreign currency should not have rips or be defaced or it will not be accepted. Foreign coins cannot be exchanged as almost anywhere else in the world. It is recommended that you do not exchange currency on the streets, as not only is it illegal, but there are people who will try to take advantage of unwary or naïve foreigners, passing off old (pre-revolution) bills as CUCs, or passing off counterfeit bills, or even passing off CUPs as CUCs for your foreign currency. Cuban banks have also been known to pass of counterfeit bills to foreigners. To play it safe, be sure to always check for watermarks.
More about Cuba money can be found www.cubagrouptour.com/information/cuba/money/#atm
