Which countries use pesos? | Stripe (2024)

The peso is the official currency of several countries, including Mexico, Argentina and Colombia. As a regional standard in Latin America, the peso facilitates substantial trade and investment activities within and across these nations. Each country's peso has distinct characteristics and economic implications which reflect that country's unique monetary policies and economic conditions.

For businesses operating in these economies, daily transactions and financial operations will inevitably involve the peso. The Mexican peso plays a huge role in global finance (particularly in the North American region), and since 2022, it has been the third-most traded currency from emerging markets. The Argentine peso, while experiencing some volatility, is prevalent in South American markets, and the Colombian peso is more stable relative to other regional currencies. These currencies influence local pricing mechanisms and price setting in commodities markets, especially for products such as copper and oil.

For international businesses, operating in pesos can minimise hassle surrounding currency conversion and mitigate some of the risks associated with fluctuations in exchange rates. However, the varying stability of the peso across different nations does require some careful financial planning and risk management. This guide will cover the historical development of the peso, and how the peso functions for cross-border financial transactions and as official domestic currency.

What's in this article?

• History of the peso
  
• Importance of the peso in the world economy
  
• Which countries use the peso?
  

History of the peso

The term "peso" originally referred to the Spanish dollar, also known as the "piece of eight". Introduced by the Spanish monarchs Ferdinand and Isabella, who reformed Spain's coinage system in 1497, the peso was a silver coin that became a standard of trade across the Americas and Asia due to its uniform size and quality – making it one of the first global currencies.

As Spain established colonies across the world, the peso became a common currency in many parts of Latin America and the Philippines and was used for trade both within the empire and internationally. In the early 19th century, many Latin American countries gained their independence from Spanish rule and newly formed nations, such as Mexico, Argentina and Colombia, adopted the peso as their official currency. Each country minted its own version of the peso, leading to a variety of currencies with the same name but different values and designs.

Throughout the 20th century, many countries that used the peso experienced economic challenges, including hyperinflation, devaluation and redenomination, which affected the value of their respective currencies.

Today, the peso remains the official currency of several countries. The most widely recognised is the Mexican peso, a highly traded currency and a major player in the North American economy. Other countries such as Argentina and Chile use pesos that are distinct in their economic context and monetary value. Despite facing numerous economic crises, the peso continues to be an integral part of the financial systems in several countries and embodies a long tradition of commerce and cultural exchange.

Importance of the peso in the world economy

While not as globally dominant as currencies such as the US dollar or the euro, the peso – particularly the Mexican peso – does have an influence on the world economy, affecting trade and investment opportunities, commodity prices and the monetary policy of each country in which it's used.

Mexican peso

• Facilitates trade: The Mexican peso is one of the most traded currencies from emerging markets. Its liquidity and volatility make it popular among forex traders, influencing foreign exchange markets and opportunities for arbitrage and hedging. The Mexican peso also facilitates regional trade and economic integration for Latin America specifically, largely due to Mexico's substantial trade relationships with countries such as the United States and Canada.

• Indicates investor sentiment: The Mexican peso is often seen as a bellwether for emerging markets. Its performance can indicate investor sentiment towards developing economies and international investors monitor its value closely. Fluctuations in the peso can affect market trends and investment flows into other emerging markets.

Colombian and Chilean pesos

• Set commodity prices: Chile and Colombia are major players in the commodity markets for copper and oil, respectively. The value of their pesos can influence global pricing and trading in these commodities, affecting international markets and economic activities far beyond their borders.
  

Which countries use the peso?

The peso is a currency name used by several countries, primarily in Latin America. Each country issues its own version of the peso, and while they share the same name, each has its own distinct value and is not interchangeable with others.

The peso is the official currency in the following countries:

• Argentina: The Argentine peso had an average exchange rate of US$0.0038 in 2023.

• Chile: The Chilean peso had an average exchange rate of US$0.0012 in 2023.

• Colombia: The Colombian peso had an average exchange rate of US$0.0002 in 2023.

• Cuba: Cuba uses the Cuban peso, alongside the Cuban convertible peso. The Cuban peso had an average exchange rate of US$0.04167 in 2023.

• Dominican Republic: The Dominican peso had an average exchange rate of US$0.0179 in 2023.

• Mexico: The Mexican peso had an average exchange rate of US$0.0565 in 2023.

• Philippines: The Philippine peso had an average exchange rate of US$0.018 in 2023.

• Uruguay: The Uruguayan peso had an average exchange rate of US$0.0258 in 2023.