By Glenda Boza Ibarra (El Toque)
HAVANA TIMES – At the end of December 2024, several people wrote to El Toque expressing concerns about rumors regarding a possible elimination of the magnetic MLC for shopping in government stores priced in US dollars.
A few days later, in January 2025, after the opening of the 3rd and 70th Supermarket in Havana—exclusively accepting payment in cash dollars or foreign credit cards, and not allowing MLC cards—the rumors began to grow.
Another death of a “national currency”
In the first days of January 2025, the MLC began to depreciate. According to the Cuba Currency and Finance Observatory, amid the latest fluctuations, the MLC has lost value against the dollar and the Cuban peso, due to doubts about its future and its continued use as a payment method.
“In December, the MLC rose by 1.43% relative to the dollar. However, from January 1 to 11, 2025, the value of the MLC has dropped dramatically (-15%), due to the expansion of dollarization in state-run consumer markets. The average rate in December was 1.22 MLC per 1 USD. In January 2025, the average rate has been 1.42, representing a depreciation of 24.6% compared to January 2024,” explained researcher Pavel Vidal.
Although state rhetoric often blames external factors or El Toque for the fluctuations in the informal market, the state press has started to acknowledge the influence of the crisis. Professors at the University of Matanzas explained to the local newspaper, Giron, that it is the economic context that determines the value of currencies in Cuba.
“Faced with uncertainty, and the thought of its possible disappearance, [the MLC] has dropped significantly in the informal currency market. However, the influx of foreign currency could help supply stores in MLC, and keep them as an option,” explained Manuel Marrero, a professor at the Department of Economics.
However, Pavel Vidal, a PhD in Economics, is not as optimistic as his colleague from Matanzas. “The MLC is following the same path as the CUC, but in less time,” he stated in a live broadcast.
Although Vidal does not know exactly what will happen, he mentioned that a likely scenario is that once the floating exchange rate is set very close to or equal to the informal market exchange rate all MLC accounts will be converted into Cuban pesos, just as they did with the CUC.
“I have no guarantees that this will be the solution but looking at what happened with the CUC and combining it with the announcements of partial dollarization, and a possible floating exchange rate for the foreign exchange market, I do not rule out that option.”
Not even little paper notes
When the Cuban government introduced the CUC in 2004, many people commented that dollars had turned into little colored pieces of paper. Later, with the introduction of MLC, dollars literally became virtual money or bank dollars, as some experts call it.
After the start of the “Ordering” reform process in 2021 and the supposed monetary unification, many people were forced to convert their savings in CUC, dollars, or other foreign currencies into MLC, deposit certificates, or Cuban pesos.
Even the state press has documented the outrage of Cubans who have seen their bank savings lose value in 2025.
A comment in the Guerrillero newspaper from Pinar del Río recounted the story of a teacher who, for a year, saved in MLC and fears that the opening of a store in the capital that does not accept this currency is the prelude to the devaluation of her account.
The text pointed out that the educator’s uncertainty is shared by many Cubans who fear seeing “their savings shrink,” just as happened to them with the CUC.
Articles in other state media, such as Escambray and Alma Mater, also referred to the lack of information about the restriction on the use of MLC cards and the mistrust and uncertainty felt by the population. Faced with the lack of information and the “signals,” some people have decided to empty their MLC cards.
“Since last year, when they said you couldn’t buy gasoline with MLC, I sensed something bad was coming,” said a driver from Las Tunas. “I got a Clásica card and changed my MLC into dollars. Luckily, it was a small amount, so I didn’t lose much in the exchange.”
A year later, Angel —a fictitious name to protect his identity— says he is satisfied with having “anticipated the events.” However, he claims that, in his 64 years, he has felt that the Cuban bank deceives him repeatedly.
“Can someone explain why with Clásica cards, which are obtained at the center by depositing dollars, you can make purchases, but with MLC cards you can’t, even though both accounts have freely convertible currencies?” asked journalist Joel Garcia in a comment on Trabajadores newspaper.
His question is the answer to why some Cubans have begun calling the MLC “ghost dollars”: Where are they? Why can’t I buy with them? Why can’t I transfer them to another dollar card?
While the government remains silent, rumors continue to spread, and people remain distrustful of banking entities.
“It’s very hypocritical [of the government] because the private sector and the population are being forced to bank in Cuban pesos and MLC, while the State is dollarizing its operations,” said Pavel Vidal, also a professor at the Javeriana University of Cali, Colombia.
Just a year ago, Vidal warned that the backing in foreign currency of the MLC, deposited in Cuban bank cards, disappears almost instantly when the currency enters.
There’s no need to announce the death of the MLC to kill it.
First published in Spanish by El Toque and translated and posted in English by Havana Times.
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