The convertible peso (sometimes given as CUC$ and informally called a cuc or a chavito) is one of two official currencies in Cuba, the other being the Cuban peso. It has been in limited use since 1994, when its value was pegged 1:1 to the United States dollar.
On 8 November 2004, the U.S. dollar ceased to be accepted in Cuban retail outlets and left the convertible peso as the only currency in circulation in many Cuban businesses. Officially exchangeable only within the country, its value was increased to US$1.08 in April 2005, but reverted to US$1.00 on 15 March 2011. The convertible peso is, by the pegged rate, the twelfth-highest-valued currency unit in the world and the highest-valued "peso" unit.
On 22 October 2013, it was announced that the currency is to be scrapped, with it being gradually unified with the lower-value Cuban peso, though as of September 2018, that unification has not been achieved, nor has any target date been officially announced.
From 1993 to 2004, the Cuban currency was split between the Cuban peso (the currency in which Cuban citizens are paid and which is used for staples and non-luxury items) and the U.S. dollar, in combination with the convertible peso, which was a foreign exchange certificate (in use since at least 1985) used for tourism and for luxury items. The Cuban peso (CUP) can be exchanged to the convertible peso (CUC) at exchange offices ( CADECA) at a fixed rate of 24 CUP to 1 CUC (sell) and 25 CUP to 1 CUC (buy); but for state bookkeeping purposes, both pesos are valued at a 1:1 rate.
On 8 November 2004, the Cuban government withdrew the U.S. dollar from circulation, citing the need to retaliate against further sanctions from the Helms–Burton Act. After a grace period ending on November 14, 2004, a 10% surcharge began to be imposed when converting U.S. dollars into convertible pesos. The change was announced some weeks beforehand, and was extended by the grace period. It has been claimed that it was because the amounts of U.S. dollars being exchanged were more than anticipated. The measure helped the Cuban government collect hard currency.
In 1994, coins were introduced in denominations of 5, 10, 25 and 50 centavos and 1 peso. The 5 pesos (rarely seen) was introduced in 1999, followed by the 1 centavo coins in 2000.
In 1994, the Central Bank of Cuba introduced notes in denominations of 1, 3, 5, 10, 20, 50, and 100 pesos. On 18 December 2006, the Central Bank introduced a new series of notes themed to "Socialist History and Achievements". The front of the notes are similar to its previous series, but on the back of the notes, instead of depicting the Cuban coat of arms on all denominations, each of the notes now has an individualized design.
Between April 2005 and March 2011, the convertible peso was worth US$1.08. The CUC is currently pegged to the U.S. dollar at 1:1, as it was between 1994 and 2005.
When U.S. banknotes are exchanged, a 10% tax is applied, plus an exchange commission. The 10% tax is not applied to other currencies; hence, American visitors may benefit by first changing their money into euros, Canadian dollars, or other hard currencies before they convert them to pesos, although such a benefit would depend on the rate at which they can get the third currency. (Some U.S. banks charge exchange margins of 10% or more.)