According to an official guideline published in Cuba’s Granma newspaper, the country will end the two-tier monetary system that it has used for almost 20 years.
Since the collapse of the Soviet Union, Cuba has used either American currency or a convertible peso—known as the CUC—that is pegged to the U.S. dollar.
In addition to the CUC, Cuban also uses the Cuban peso, or CUP, with which the majority of Cubans are paid and which is worth a fraction of the CUC currency.
Typical wages in Cuba range from 400 non-convertible pesos a month for a factory worker to 700 per month for a doctor—a range of approximately US$17-30 per month.
Cuban state workers receive a portion of their wages in convertible pesos and the rest in Cuban pesos.
Since many products that are imported to Cuba can only be bought with the U.S.-dollar-based CUP currency, a socio-economic disparity has been created between those Cubans who work in the tourism industry and have access to the lucrative tourist and foreign-trade sectors and those not connected to the tourism industry.
Cuba’s Central Bank said it will continue to back both the CUC and the CUP when it begins the process of unifying the two currencies. The bank said the change will make Cuba’s economic system more efficient, making it easier to calculate labour costs and other statistics.
Details on how the government plans to consolidate the two currencies were not provided.