Carlos Saladrigas, a Cuban-American entrepreneur and head of the Cuba Study Group, expressed in a CiberCuba interview that while Cuba meets many of the prerequisites for adopting dollarization, the move comes with significant political and economic costs, specifically the loss of monetary sovereignty.
"Choosing to dollarize has both pros and cons. When considering the typical conditions that support a nation's shift to the dollar, Cuba aligns with most, but not all," stated Saladrigas. Born in Havana and having moved to Florida in 1961, the 77-year-old businessman has advocated for Cuba's economic opening since 2001.
Saladrigas was clear about the implications of adopting the dollar as the official currency: "By dollarizing, Cubans lose sovereignty as we forfeit control over our currency." This loss, he explained, encompasses the inability to use monetary policy to manage inflation or extend credit, crucial tools in any economic recovery process.
As an alternative, Saladrigas suggests stabilizing the Cuban peso with external financial backing, referencing the U.S. loan to Argentina as an example. "There are other methods worth exploring for stabilizing our currency, but it will require significant effort and funding. We need financial support from the International Monetary Fund or another entity to help stabilize," he remarked.
Saladrigas points out that Cuba's fundamental issue is its lack of a functional banking system. "No one will deposit dollars in a Cuban bank without assurances of withdrawal when needed," he warned. This absence of institutional trust complicates any stabilization efforts, whether with native currency or the dollar. The banking collapse in Cuba was already apparent by late 2025, with long queues at branches unable to meet demand.
The Cuban currency debate arises amidst an unprecedented monetary collapse. In December 2025, the regime enacted Decree-Law 113/2025, legalizing internal transactions in dollars and euros for selected sectors such as exporters, small businesses, and cooperatives. Despite the government's insistence that this measure is "temporary," it denies any intention to dollarize the economy.
During the same month, the peso experienced its largest devaluation on record: from 120 to 410 pesos per dollar at the official floating rate, a 242% drop, while the informal market priced the dollar at 440 pesos. The average Cuban salary now amounts to less than $10 monthly.
Saladrigas frames the currency discussion within a broader transition strategy he outlines in three phases: a stabilization period of two to four years costing an estimated $6 to $10 billion, followed by a five-year infrastructure reconstruction phase, and a strategic vision stage where Cuba could emerge as a Caribbean financial hub. "Do we want to be a Singapore, or a blend of Singapore with Israel or the Baltic states?" he questioned.
Regarding the source of these resources, Saladrigas was direct: "Cuba lacks oil. The funds needed for transition won't come from the ground. We, the Cuban people, must work hard for it." The geopolitical landscape also plays a role, as Trump's negotiations with Cuba have reignited discussions about Washington's involvement in any economic opening of the island.
Exploring Cuba's Potential Dollarization
What are the potential consequences of Cuba adopting the dollar?
Adopting the dollar could lead to a loss of monetary sovereignty, meaning Cuba would lose control over its currency, impacting its ability to manage inflation and credit.
What alternative does Carlos Saladrigas propose for Cuba's economic stabilization?
Saladrigas suggests stabilizing the Cuban peso with external financial support, similar to the U.S. loan to Argentina, to aid in economic recovery.
How has the Cuban peso been affected recently?
The Cuban peso underwent a significant devaluation, dropping from 120 to 410 pesos per dollar at the official rate, with the informal market reaching 440 pesos per dollar.