Money is an asset or product that allows and facilitates the exchange of other goods and services. The history of Guatemala's monetary system begins with a barter system. Previously, various goods were used as a medium of exchange for their transfer. These were hides, metal, animals, wheat, barley and tools. The name of the currency of Guatemala is rooted in ancient times.
Origin
The appearance of the monetary system of this country dates back to the Mayan era, when quetzal feathers (local bird), salt, obsidian, precious stones, jade and especially cocoa were used as a means of payment. Spanish colonization established a monetary system to abandon the practice of barter. A new structure was created based on the money of the conquerors.
The lack of easily accessible currency has led to the minting of coins in various American countries, especially in Guatemala. Spanish money, which was imported or produced in mints of the American continent, mainly in Mexico, Bolivia and Peru, continued to circulate until the first quarter of the 19th century.
Diversity
Later coins of the Great Republic of Central America or the Federal Republic of Central America were minted. With the advent of the nation state and the founding of the Republic of Guatemala, the government of Rafael Carrera adopted the "peso", while the system included the use of zloty and silver money.
In the last thirty years of the 19th century, the decimal system coexisted using a different monetary structure based on the binary system. At this time, banknotes were issued, and by the end of the century one peso was no longer minted, only coins of a lower denomination remained.
In the same period, Guatemala's curious money appeared, known as “saddles,” tiny notes issued by municipalities and commercial institutions to pay debts. The issue of private currencies, called “features,” was also regulated; they were published for use on farms, hotels, or commercial companies.
State regulation
In November 1924 and February 1925 the “Law on Currency Exchanges” and the “Law on Credit Institutions” were adopted. Two alternatives to issuing gold coins or a currency convertible into gold were considered: one requiring an external loan, and the other collecting national resources. Accepted the last option. In accordance with the law, a gold standard was adopted and a new currency of Guatemala, the quetzal pegged to the US dollar, was created. The Bank of Guatemala, the only institution authorized to issue currency, received the right to create it.
Based on the exchange rate of the US dollar a year earlier, it was decided that the quetzal would be equal to 60 pesos, and the issuance of money would remain exclusively with the state. Under the new regime, silver and copper coins functioned as the small currency of Guatemala (large denominations were issued only in banknotes). In 1925, silver coins were created in denominations of 1 quetzal, ½ quetzal, ten and five centavos, as well as one centavo made of copper alloy. In 1926, 20, 10 and 5 quetzals were made of gold. In 1932, two new denominations were introduced: ½ centavo and 2 centavo from an alloy of copper and zinc.
The second reform of the republic's monetary and banking system was the result of the October Revolution of 1944, which followed the democratization and development of economic thought of that time. Purpose: to provide the country with institutions to ensure domestic economic stability and to facilitate the progressive and orderly development of production. To this end, the Congress of the Republic issued Decree No. in the last months of 1945. 203 “Money Act” and Decree No. 215, The Bank of Guatemala Act, which provided the legal basis for the development of a modern central banking system.
Before the establishment and launch of the new institution, the Government of the Republic and the Central Bank of Guatemala signed an ad referendum agreement on June 15, 1946. From now on, the state had the right to issue funds through the Bank of Guatemala, which also had to accept obligations on banknotes in circulation and deposits.
On September 15, 1948, the first banknotes with new characteristics and designs were issued in denominations of 50 centavos, 1, 5, 10, 20 and for the first time 100 quetzals. The bank also minted coins of 25, 10, 5, and 1 centavo.
Modern stage
On August 20, 1964, under the leadership of Colonel Enrique Peralt Azurdia, Decree No. 265 “Law on the types of money” was issued, which determined that 50, 25, 10, 5, and 1 centavo coins would be issued. Moreover, for each of them, alloys, the amount of metal, weight, construction, diameter and thickness were determined. 50 centavos, 1, 5, 10, 20, 50, 100, 500 and 1000 quetzals began to be issued in banknotes, the law fixed the size and appearance of the Guatemalan currency.
On January 6, 1997, the Congress of the Republic issued Decree No. 139-96, which contained a new law on the types of monetary units. He included the possibility of issuing banknotes of 200 quetzals.
The last change in performance was established by Decree Nos. 92-98 of the Congress of the Republic of Guatemala on November 26, 1998, which transformed the design on the back of one quetzal. The Agreement on a Lasting and Lasting Peace, signed on December 29, 1996 by the Government of the Republic and the National Revolutionary Division of Guatemala, was a historic event, depicted as the main motive of the legal tender coin.
Interesting facts about the currency of Guatemala
Quetzal owes his name to a bird that lives in Central America and is currently threatened with extinction.
The coins on the front side depict the national emblem of Guatemala.
The diameter of the 10 centavo coin is 21 millimeters.
1 quetzal with the inscription Paz ("Peace") in the form of a stylized dove, with the inscription Paz Firme y Duradera ("Solid and durable peace") - on the back, "December 29, 1996" - under it and to the right - the number 1 and the word "quetzal ".
On each banknote there is an image of a bird that gave the name to this currency.
Structure of the financial system
Quetzal (GTQ) is divided into 100 centavos. Guatemala's surprisingly stable exchange rate against the US dollar is approximately 8 to 1. Guatemalan coins 1, 5, 10, 25 and 50 centavos and 1 quetzal are in circulation. Banknotes of the country include a bill in 50 centavos, as well as 1, 5, 10, 20, 50, 100 and 200 quetzals.