Meaning “weight” or “pound,” the peso is a form of currency that originated in Spain. The peso has served as a significant currency internationally and is used in numerous former colonies of Spain.
The term peso was initially used in Spain and Spanish-speaking parts of the Americas to refer to the real de a ocho (8-royal) silver coin, which was commonly called the thaler in Europe. Initially called the “piece of eight,” the coin was mostly minted during the mid-16th century in Spain, Mexico, and Peru. The coin’s legal weight was 0.9689 ounces and a millesimal fineness value of 930.5. This initial currency became popular and important in trade during the 17th century.
The currency's name eventually changed to the Spanish dollar or the Mexican dollar, depending on where it was used. In response to financial challenges, Spain devalued it currency by approximately 20% in 1686 through the introduction of new coins that were lower in weight and contained less silver. After these changes, the older and heavier pesos were still produced because of their widespread popularity in trade, especially in the Far East and India. The new currency was intended for use only in Spain.
The peso continued to be used until the introduction of the peseta by the French between 1686 and 1868. The peseta, which means "small peso," had a value of two reales. Eventually, the Spanish coin worth two reales also adopted the name. The new coin in Spain, which had been renamed as peseta, eventually took the place of the older peso. Mexico minted the last peso worth eight reales in 1897.
The Philippines also had a peso, the Philippine peso, which was most popular between the 17th and the 18th century. The name has stuck with the national currency of the Philippines even after the Philippine Revolution of 1896 and the declaration of independence in 1898.
Countries That Use the Peso
There are currently eight countries that use the peso, almost all of which are in the Americas: Argentina, Chile, Colombia, Cuba, the Dominican Republic, Mexico, the Philippines, and Uruguay. However, each country has its own peso. For example, Argentina uses the Argentine peso, Cuba uses the Cuban peso, the Dominican Republic uses the Dominican peso, and Mexico uses the Mexican peso.
There are also 14 countries, including Spain, which previously used the peso. Some of the other countries include Equatorial Guinea, Puerto Rico, Costa Rica, and El Salvador. Peru was the first to abandon the peso in 1863, while Spain was the last, abandoning it in 2002 upon adoption of the Euro.
Challenges of the Peso
The future of the peso is uncertain. Most notably, the Argentine peso has quickly decreased in value in recent times. In fact, the peso ranks highest on the list of currencies with the highest drop in value, despite all efforts to save it by the authorities.