On December 16, a notable development occurred in Cuba's informal currency market: the Freely Convertible Currency (MLC) saw a significant price increase.
This Tuesday morning, the MLC climbed to 300 Cuban Pesos (CUP), marking a five-unit rise compared to the previous day's value.
Despite forecasts, the MLC not only persists but also displays a remarkable resilience amidst Cuba's economic turmoil.
Meanwhile, there were no changes in the informal exchange rates for the dollar and euro on this December 16. The U.S. dollar remains valued at 440 CUP, and the euro continues at 480 CUP per unit, according to Monday's daily report by the independent media outlet elTOQUE, which tracks fluctuations in currency prices across Cuba.
Exchange rates as of December 16, 2025, at 6:05 a.m. in Cuba are as follows:
- USD to CUP exchange rate as per elTOQUE: 440 CUP.
- EUR to CUP exchange rate as per elTOQUE: 480 CUP.
- MLC to CUP exchange rate as per elTOQUE: 300 CUP.
The Resilience of the MLC
Throughout much of 2025, the MLC's informal exchange rate dropped significantly against the Cuban peso. This decline was driven by public distrust, increased cash dollar usage, and a reduction in products available in state-run MLC stores.
These factors fueled persistent rumors about its looming disappearance as a relevant payment method in Cuba's economy. However, despite these warnings, the MLC has managed to survive, displaying a notable resilience.
In recent days, its value in the informal market has risen again, even amid occasional declines. This uptick is surprising given the dominance of the dollar and euro in informal trading.
For months, elTOQUE has indicated that the MLC's sporadic increase can be attributed to several factors: limited cash dollar availability, the necessity to access specific products sold only in MLC stores, and seasonal or situational demand that has driven its use.
Additionally, while declining, the MLC payment infrastructure remains operational: many bank cards still have balances in this currency, and some stores continue to accept it.
Thus, the MLC remains an ambiguous monetary instrument: in decline, yet still functional. Its recent trajectory underscores the complexity of Cuba's economy, where no currency seems stable, and even one thought to be obsolete can unexpectedly regain strength.
New Currency Management System in Cuba
Last week, the Cuban regime announced that on December 17, the new Decree-Law 113/2025 will take effect, legalizing and regulating the internal use of the dollar, euro, and other foreign currencies within the national economy.
This new legal framework establishes a currency management, control, and allocation system, marking a departure from the 2021 "Monetary Reorganization" by allowing the Central Bank of Cuba and the Ministry of Economy and Planning (MEP) to authorize foreign currency transactions.
Key measures include:
- The authorization of dollars and other currencies for internal transactions.
- The creation of the Currency Access Capacity Allocation (ACAD), a mechanism allowing authorized businesses and individuals to purchase foreign currency from the state using Cuban pesos.
- The legalization of bank accounts in foreign currencies for micro, small, and medium enterprises (MSMEs), cooperatives, and self-employed workers.
- Non-state entities can retain up to 80% of their hard currency income; the remainder must be surrendered to the state.
- Internal payments in dollars or euros are permitted, consolidating a dual economy where access to foreign currency becomes a regulated privilege.
Although the government insists this is a "temporary" measure, the decree institutionalizes partial dollarization of the Cuban economy and reinforces state control over currency flow, deepening the divide between those operating in dollars and those relying on CUP.
Equivalence of U.S. Dollar (USD) bills to Cuban Peso (CUP), according to exchange rates on December 16:
- 1 USD = 440 CUP
- 5 USD = 2,200 CUP
- 10 USD = 4,400 CUP
- 20 USD = 8,800 CUP
- 50 USD = 22,000 CUP
- 100 USD = 44,000 CUP
Equivalence of Euro (EUR) bills to Cuban Peso (CUP):
- 1 EUR = 480 CUP
- 5 EUR = 2,400 CUP
- 10 EUR = 4,800 CUP
- 20 EUR = 9,600 CUP
- 50 EUR = 24,000 CUP
- 100 EUR = 48,000 CUP
- 200 EUR = 96,000 CUP
- 500 EUR = 240,000 CUP
Understanding Cuba's Currency Challenges
Why is the MLC increasing in value?
The MLC's value is rising due to limited availability of cash dollars, demand for products sold only in MLC stores, and certain seasonal or situational factors boosting its use.
What impact does Decree-Law 113/2025 have on Cuba's economy?
Decree-Law 113/2025 legalizes foreign currency usage within Cuba's economy, partially dollarizing it and increasing state control over currency flow, thus widening the economic divide.
How does the informal market affect Cuba's currency stability?
The informal market contributes to currency instability in Cuba by reflecting real demand and supply dynamics, often diverging from official rates and impacting economic strategies.