We’ve written a previous blog on the currencies of socialism and how they don’t quite work the same as those of capitalist countries. One of the flagship ‘socialist currency’ countries is Cuba, with its unique dual Cuban currency system of CUP and CUC.
If you want to find out if you can use your bank card in Cuba then you’ve come to the right place. But first…
What is the currency of Cuba?
The two types of Cuban currency are both pesos. The peso as a monetary unit has its origins in imperial Spain and is found throughout many former Spanish colonies. For example, the currency of the Philippines is the PHP, or Philippines peso.
Cuba’s currency was the peso pre-revolution, and was still the peso post-revolution. The difference is that it stopped being a ‘hard’ currency and became a ‘soft’ one. What’s the difference? We once again refer you to our previous blog on the matter!
Cuban currency and the dual-currency system
This brings us to Cuba’s dual-currency system: the Cuban peso (‘CUP’, sometimes marked MN or Moneda Nacional) and the Cuban convertible peso (‘CUC’). The CUP is the ‘soft’ currency that Cubans who work in the state sector get paid their basic salary in. It’s also the money they generally use to buy basic necessities and pay gas, electricity etc. The CUP is fixed at 24:1 (buying) or 25:1 (selling) against the CUC.
The second currency, the CUC, is Cuba’s hard currency and is fixed 1:1 against the US dollar. But why does this currency even exist? Easy. This is the currency that replaced the US dollar as the ‘hard’ currency of Cuba after the USD was briefly used in the early 1990s. It is intended to be used for anything involving ‘abroad’, including services for tourism and travel, and for most imported goods.
It has sometimes been said that the CUP is ‘for Cubans’ and the CUC is ‘for foreigners’. This was once sort-of true, but is no longer really the case. Firstly, there are no restrictions on foreigners obtaining or spending CUP, and similarly, no problems with Cubans using CUC. Secondly, most shops will nowadays accept payment in either currency (at the 24:1 exchange rate). Indeed, the Cuban government has indicated its intention to abolish the dual currency system, although no fixed date has been set for this.
TL;DR – Cuba has two currencies that circulate in parallel with a fixed exchange rate between them! Simple enough, right?
Can I spend US Dollars in Cuba?
The US dollar was briefly allowed to circulate in Cuba in the 1990s after the collapse of the Soviet Union, but was soon replaced with the CUC. For many years there was a 10% tax applied to changing USD cash into CUC. This often meant that US visitors could get a better deal by changing their cash into Canadian dollars or Euros before arriving in Cuba and changing it a second time for CUC!
Now, in 2020, the Cuban government is keen to get hold of more US dollars. It needs these for purchases on the international markets such as oil, computers, cars etc. As of 2020 there is no longer an extra charge for people changing USD cash to CUCs in Cuba. So, if you want to bring cash, you can change US dollars, pounds sterling, euros and Canadian dollar banknotes equally easily. Just make sure the notes are clean and in good condition without any marks or tears.
Also in 2020, a number of shops were opened selling goods priced in USD. They sell things like domestic appliances, higher-end imported packaged food and car parts. Payment in these ‘MLC’ shops is made using an electronic bank card. This can be a foreign MasterCard or Visa card, issued by a bank that allows payments in Cuba. Cubans can also open an account in their local bank branch denominated in USD, pay in any major foreign currency, then use their bank card to make purchases in these shops.
Most foreigners on short visits won’t need anything from these shops, but their existence makes individual Cubans keen to get hold of foreign currency. As a result, you can sometimes pay (or tip) private businesses in US dollar or euro banknotes.
Can I use my bank card in Cuba?
Cuba is still mainly a cash economy, although this is beginning to change, with petrol stations and supermarkets now accepting bank cards. In practice you’ll still mostly need cash in CUCs. ATMs are plentiful, and accept international MasterCard, Visa and UnionPay cards. What really matters though, is if your own bank will permit the transaction. Sadly, all US banks and many non-US banks bow to pressure from the US government to avoid dealing with Cuba. It’s best to double-check with your bank, and bring cards from various different banks to maximise chances of being able to withdraw cash..