The Colombian peso

Where the peso came from

Colombia kept the Spanish colonial real until 1820 and then issued a Colombian real. The peso replaced it in 1837 at eight reales to one peso. Ten years later the government decimalised the currency, splitting the peso into ten reales of ten décimos each. The Banco de la República's encyclopedia notes that pesos and centavos took many years to push aside the cuartillos and escudos of the Spanish system. Centavos first appeared on coins in 1872.

In 1871 Colombia went onto the gold standard and pegged the peso to the French franc, one peso to five francs. That peg lasted until 1886.

Who printed notes before the central bank

Five provinces, among them Cauca, Panama and Santander, issued paper money of their own between 1857 and 1880. More than sixty commercial banks issued notes between 1865 and 1923, and the larger ones had them printed in England or the United States. A proposal of March 1880 created a Banco Nacional, which put out notes from 1881. In 1887 the government used powers from the Constitution of 1886 to stop private banks from issuing.

The encyclopedia describes the Banco Nacional turning into a machine for printing the notes the wars required. From 1888 the paper money lost value so fast that the rate between paper and coin was fixed at 100 paper pesos to one coin peso. The Treasury took over note production in 1904, and a Conversion Board issued notes from 1910.

How the Banco de la República took charge

In March 1923 the government hired a mission of experts led by the professor Edwin Walter Kemmerer, and the Banco de la República came out of its advice. The bank took over paper money that year. It had planned to open in 1924, but the collapse of the Banco López pushed it to open six months early, so its first notes were older notes of the Casa de Moneda de Medellín overprinted with the new bank's name. Its regular notes were convertible into gold and printed by an American company. Convertibility ended in 1931, when the bank declared control over gold.

The peso then moved to a peg with the US dollar, 1.05 pesos to the dollar, which held until 1949. Notes kept the words peso oro until 1993. On 12 October 1959 the bank's own printing works started up with a one peso note designed by the Italian Mario Baiardi.

Why amounts run to thousands

Inflation in the 1970s and 1980s led Colombia to stop issuing centavo coins in 1984. Accounts and bank statements still record amounts to the centavo, but most cash payments are rounded to the nearest 100 pesos. The bank issued a 1,000 peso coin on 12 November 1996 in homage to the Zenú filigree goldsmiths, then withdrew it in stages after heavy counterfeiting; it was out of circulation by 2002. A series of coins showing the country's plants and animals entered circulation on 13 June 2012, with bimetallic 500 and 1,000 peso pieces.

The notes issued from 2016 run from 2,000 to 100,000 pesos, and on them the word mil takes the place of the last three zeros. Congress debated in 2018 whether to strike three zeros from the peso at 1,000 old pesos to one new peso. The notes had been designed so that nuevos could replace mil. Critics pointed to the cost and to confusion in an economy that runs largely on cash, and the government set the proposal aside.