Cuban Monetary System. History and Operation. Socialism and its achievements.

This is the question that many foreigners ask themselves and never seem to understand. Why do different national currencies circulate in a country like Cuba? here types of currencies have circulated in Cuba at the same time, the CUC, the CUP and the MLC, although the latter circulated behind people's backs all the time.

CUP: Cuban peso
CUC: Cuban convertible currency
MLC: Freely convertible currency ( US dollar, Euro etc.)

"The Cuban monetary system has been created in this way to be able to differentiate the currency of the poor from the currency of the rich."

Before Cuba was governed by Fidel Castro (before 1959) the country had one of the strongest and most prosperous economies in Latin America and the Caribbean, we were only surpassed by the United States. Cuba was a Capitalist country, developed with a free market where the currency that circulated throughout the country was the Cuban Peso (at this time CUP) which had the same value as the American dollar (1 x 1) so it was possible to negotiate in the international market with this currency due to its support given in the great production of the country. At that time in Cuba both currencies circulated, the American dollar (MLC) and the Cuban peso. (CUP) It is important that you know these data so that you understand the destructive magnitude of Socialism.

After the Cuban economy was destroyed at the hands of Fidel, the Cuban peso (CUP) began to lose its value due to the country's low production. In the mid-90s, the Cuban Dictatorship realized that it needed dollars to be able to carry out its business and to be able to buy raw materials in the international market, so it created a new monetary system in Cuba called CUC, which in the beginning had the same value of an American dollar with the difference that could only be used in Cuba. 

Why was the CUC created?

The Dictatorship creates this monetary system so that all US dollars that enter the country by any means end up in its hands. Forcing everyone who has US dollars to make the change to CUC to be able to buy in the stores on the island. The Dictatorship achieves this objective by punishing with jail every citizen in possession of US dollars (MLC)

As I have already explained in each of my articles, the communists do not know anything about economics, that is why they destroy prosperous countries like Cuba was. The most shameful thing about this whole story is that Fidel said many times that Cuba would never use the US dollar as the main monetary system in its international campaigns against the United States of America, when the reality is that all the dollars that entered the country were in its  bank accounts. Then it happened that the socialist economists realized that the country's economy did not depend on production but on the money that came in each year because of tourism and salary remittances sent from abroad and they made the worst mistake that an economist can make. They began to print money (CUC) without any support, thus inflating the country's economy even more. If you don't know these terms, that's fine, I'll talk about that later anyway but the inevitable happened.

The Castro family began to waste money around the world, billions of dollars were invested in the construction of Hotels and other tourist settlements, then it happened that the Administration of the United States of America saw all the fraud that the Cuban Dictatorship was committing against the people and against properly foreign companies that did business with them and decided to restrict American tourism to Cuba, one of the main routes of enrichment owned by the Castro’s family, which has never invested a single dollar in the country's economy to improve the living conditions of Cuba citizens. 

The Dictatorship began to spend more than it had but continued to print CUC without any value. (The same thing happens in Venezuela) In this way, prices in Cuba continued to increase due to shortages due to lack of production, leading the Cuban to pay almost 3 times the original price of a product.

Barely 6 months ago the Castro’s family decided to do the obvious and eliminate the circulation of the CUC throughout the country, because it makes no sense to continue using a currency of no value and as expected, this measure resulted in the elimination of the savings of thousands people who despite everything, believed in the system or simply had no knowledge of what was happening in the country's economy. All of this happened in the middle of the Covid-19 Pandemic.

The rate of change according to the Dictatorship right now is:

1 MLC = 120 CUP

How is it logical this is impossible due to the law of the market supply - demand where prices rise and fall depending on these aspects mentioned above which means that: 

1 MLC will never be 120 CUP when you try to change them in the streets. Most likely, you will double them. The current rate in the alternative market ( black market) is: 1 MLC = 200 CUP and continues to grow. This happens because the free market is impossible to manipulate! And this price will continue to rise because of demand!

Cuban banks pay when they feel like it.

Because the money that Cubans keep in the banks (which belong to the Dictatorship) is in constant movement through the country, it is impossible for Cuban citizens to withdraw large sums of money, for example 300 dollars. The money is withdrawn little by little and this process can take more than a month. The same happens in the currency exchange houses in Cuba called CADECA where the Dictatorship provides these offices with a limited number of dollars, which they themselves buy and then re-sell on the street, on this way, they obtain all the dollars that have entered the country through unofficial channels and that citizens possess.

What happened to the US dollar? (MLC)

It happens that the Cuban who works in Cuba receives his monthly salary in Cuban pesos (CUP) but all food and other provisions are sold to the population in American dollars (MLC) In my personal opinion this is immoral. Thus creating a clear social division between those who have dollars and the poor who have nothing. But this does not end here. People who have (MLC) must create a bank card which only works in Cuba. In it, the citizen must place the money and only on this way they are allowed to use it. This happens because the Dictatorship does not want people to have the cash in their hands, otherwise the Cubans take that money out of the country and spend it abroad. Then...

Why does the Dictatorship create bank cards in Cuba if the population does not receive their salary at MLC?

Well, the true is that these cards have been created by the Dictatorship for us, Cubans who live abroad and we charge in dollars or another type of currency with value. Thousands of Cubans outside of the country send money to their relatives through these cards. The Dictatorship uses the Cuban family as a method of extortion that allows them to continue residing foreign remittances. 

The Cuban Military Dictatorship is bankrupt.

Due to its low liquidity, no country in the world dares to make a loan to them in cash. That is why it is important that we do not travel or send money to Cuba. The all country is a business from which the Dictatorship enriches itself and uses its citizens as slaves and does not even respect their natural rights. In summary.... Currently in Cuba there are 2 types of currencies although the reality is that only one has value.

Everything related to the Cuban monetary system explained in a precise and detailed way. You want to know more?