The U.S. Embassy in Cuba has publicly criticized the Cuban government for its inconsistency and failure in monetary policy. Despite years of vocal opposition to the U.S. dollar, Cuban authorities have adopted it as a common currency out of economic necessity.
In a statement shared on its official X account, the Embassy highlighted that the regime spent years harshly denouncing the dollar, only to embrace it due to economic pressures. "Unable to manage their own currency, they now rely on the very system they once sought to ban," the message declared.
The Embassy further noted that this decision is a "public admission of a failed economic policy," which has led to "greater inequality for Cubans" by creating a segmented market between those with access to foreign currencies and those earning solely in Cuban pesos.
In recent years, Cuba has opened stores operating with Freely Convertible Currency (MLC), which accept only foreign currencies. Independent economists argue that this move has widened social disparities and weakened the purchasing power of the Cuban peso, which continues to depreciate.
The use of the dollar in retail was restricted back in 2004 when the government imposed a tax on its circulation. However, the worsening economic crisis, compounded by the pandemic and a decline in tourism, forced the regime to reauthorize the dollar in 2020 to attract foreign currency—a decision initially labeled as "temporary" but still in effect today.
By December 2024, the regime approved a document regulating the "partial dollarization of the economy," reflecting the increasing influence of the U.S. dollar in the country. Officials presented this as crucial for boosting key economic sectors.
The Dollar's Growing Dominance in Cuban Economy
Currently, the dollarization of Cuba's economy is progressing steadily, with the Cuban peso (CUP) and the MLC losing ground to the U.S. dollar. Each day, new businesses adopt exclusive USD transactions, sidelining the MLC in stores where it was once the primary currency.
Washington's critique comes at a time when the Cuban economy is grappling with persistent inflation, shortages of basic goods, and an informal exchange market where the dollar is valued significantly higher than the official rate.
Understanding Cuba's Economic Shift
Why has the Cuban government adopted the U.S. dollar despite previous criticism?
The Cuban government has adopted the U.S. dollar out of economic necessity, as it has struggled to manage its own currency and needs foreign currency to stabilize its economy.
What impact does the dollarization have on Cuban society?
Dollarization has led to greater inequality, creating a divide between those with access to foreign currencies and those who only earn in Cuban pesos. It has also weakened the purchasing power of the Cuban peso.
How has the economic crisis affected Cuba's monetary policy?
The economic crisis, exacerbated by the pandemic and a drop in tourism, forced the Cuban government to reauthorize the use of the dollar in 2020 to attract foreign currency, despite previously restricting it.