History of the Mexican Peso

"Due to the huge mining wealth of the Viceroyalty of New Spain, during the 300 years of colonial rule in Mexico, currency consisted of gold, silver and to a lesser degree, copper coins. Paper money did not appear in Mexico until the nineteenth century, after independence was achieved."

"After independence was gained in 1821, Mexico adopted a monarchic government led by the criollo leader Agustin de Iturbide, who faced a severe economic crisis resulting from the eleven-year war. In order to resolve the crisis, Iturbide attempted several measures: He resorted to mandatory borrowing through both civil and military wage deductions and to tax increases. Nevertheless, the plan did not produce the results which had been expected and which were needed to support the growing expenses of the court. Instead, it proved counterproductive—the project only augmented the emperor's lack of credibility. As a drastic measure, paper money was issued on December 20, 1822".

"In 1823, Mexico became a federal republic. The new government tried to correct the treasury mistakes made by the Empire and to restore public trust in the government's financial management. Among other measures taken, mandatory loans were stopped and the imperial banknote was withdrawn from circulation."

"Several decades after the monetary failures of the Empire and the Republic, paper money was finally accepted in Mexico. This time, the banknotes achieved great success and were sometimes even preferred to coins."

"The revolution against Porfirio Díaz's government, which began in 1910, would lead Mexico once again to a currency shortage and to a collapse in the acceptance of banknotes. Large quantities of coins were withdrawn from circulation due to the fighting and, if that were not enough, banknotes were rejected again."

"Banco de México began operating on September 1, 1925. Issuing and regulating the circulation of currency were among the functions of the new central bank. Restoring users' trust in banknotes was one of the key challenges Banco de México faced when it issued its first paper banknotes, acceptance of which was made voluntary in order to gradually restore the public's use of and trust in this payment medium."

"The first Banco de México banknotes were printed by the American Bank Note Company of New York (ABNC). This first series (1925-1934) consisted of five, ten, 20, 50, 100, 500 and 1000-peso banknotes."

"A new chapter in Mexican banknote history opened in 1969 when Banco de México Banknote Factory began operations. With it, a new generation of Mexican banknotes appeared. These banknotes were made using the latest technological advances and had designs incorporating iconography and concepts departing from those that had previously prevailed."

"With the aim of simplifying the handling of domestic currency amounts, a new unit of the national monetary system was created. In order to distinguish it from the former monetary unit, for a transitory period the adjective “nuevo” (new) was used before the word 'peso'."

"At the end of 1992, a new series of banknotes was printed also bearing the name "nuevos pesos," but with new designs."

"The process concluded with the elimination of the adjective "new" from the unit's name in the next series of banknotes, issued by Banco de México from 1994 to 2001."

"Later, in October 2001, a new issue was put into circulation (type D1 banknotes), conserving the same designs but adding new safety features to the notes that already existed. This issue joined the banknotes already in circulation."




Source: Central Bank of Mexico