Are you traveling to Mexico or sending money home? Then you’ll need to turn your USD, CAD, or other currency into Mexican pesos.
While the Mexican peso is the national currency of Mexico, you may not know that it used to be widely accepted as legal tender in the U.S., Canada, and even some Asian nations.
The fact is, the Mexican peso isn’t just banknotes and coins. It also serves as a link to history in the Americas.
Keep reading to learn more about the Mexican peso, from fun facts to practical considerations.
Mexican peso essentials
The Mexican peso is the official currency of Mexico and is the third most popular currency in the Americas, after the U.S. and Candian dollars. Its roots trace back to Spain and it was the first currency to introduce design measures to prevent counterfeiting.
In addition, it has several local nicknames, including: lucas, lana, marimba, money, morlacos, papiros, and varos. The Mexican peso is minted by the national central bank, the Bank of Mexico.
- Currency code: MXN
- Abbreviation: $ or Mex$, ¢ for centavos
- Coins: 5¢, 10¢, 20¢, 50¢. $1, $2, $5, $10, $20, $50, $100
- Banknotes: $20, $50, $100, $200, $500, $1,000
A short history of the Mexican peso
Imported from Europe during colonization, the peso originated from an earlier currency, the Spanish dollar. The Spanish dollar was also known as a “piece of eight.” Eight pesos were equal to one real.
In the mid-1800s, the Spanish dollar fell out of use in Mexico. The first minting of the coin peso was in 1866, which was made up of 100 centavos. Nevertheless, reales continued to be issued until the end of the 1800s.
Gradually, the gold and silver content of the coins was replaced with less expensive metals. The last silver peso coins were issued in 1977.
The late 20th century was difficult for the peso. The 1970s oil crisis had devastated the Mexican economy. Not only did the country default on its national debt, but wealth left the country and the peso suffered from inflation.
To combat further devaluation, the government introduced the nuevo peso (new peso) in 1993. A single nuevo peso equaled $1,000 old pesos.
Once the old notes and coins were out of circulation in 1996, the currency dropped the term nuevo.
The Bank of Mexico is still altering the peso today. The most recent change was to the figures on the $200 note in September of 2019, which now features José María Morelos y Pavón alongside Miguel Hidalgo.
The currency exchange rate in Mexico explained
If you look at the historical exchange rate charts for the USD to MXN, you’ll see that since 2016, the exchange rate has hovered around $20 MXN per $1 USD. However, it was much lower in the past.
The Mexican peso is one of the most stable currencies in the Americas. Nonetheless, Mexico is considered an emerging market and its economy has taken a beating over the past few years. Due to COVID’s impact, the currency dropped another five points in 2020.
In addition, the Mexican peso’s value is affected by falling crude oil prices and rising interest rates.
To learn more about how exchange rates are calculated, this 2021 guide to exchange rates answers all of your questions.
6 fascinating facts about the Mexican peso
While you might think that currency is pretty straightforward or even boring, every coin or banknote has a story. This is especially true for a currency with as much history as Mexico’s.
Here are a few of our favorite facts about Mexico’s money:
Think $ stands for USD? Think again.
It’s easy to see the dollar sign ($) and think of the U.S. dollar. But it was the Mexican peso that first used the $ symbol for their coins!
The $ sign originates from the abbreviation ‘ps’, which was used to denote Spanish pesos in the Americas.
The first peso banknotes weren’t printed in Mexico.
While the Bank of Mexico prints the modern-day peso, that wasn’t always the case. In their first round, the Mexican peso was printed by the American Bank Note Company of New York (ABNC) from 1925-1934.
However, just because they were printed in ABNC doesn’t mean the Mexican people didn’t have any input. The Bank of Mexico told ABNC what they wanted on each note, and sent images from their archive when possible.
Peso literally means “weight.”
Peso is Spanish for “weight.’ This can be linked back to the Latin pensum, “something weighed,” from the verb pendere, “to weigh.”
When you consider that the peso used to be made of precious metals like gold and silver, it makes sense that the coin would be valued by weight.
It’s really hard to make counterfeit pesos.
Peso banknotes are designed and printed to prevent counterfeiting. For example, every note has a hidden watermark, holographic threads, and contains micro-prints.
Furthermore, except for the $20 and $50 peso notes, all notes are printed on special bank note paper. This has the same feel or texture as USD or CAD.
Some locations accept both USD and MXN.
Still have some Mexican pesos left when you travel back to the U.S.? If you’re stopping by any towns on the border, you may be able to use your MXN.
Conversely, you’re often able to use your USD in Mexican cities and big resort towns.
The peso was an early currency model.
The Mexican peso was not only issued before the American dollar, but it also inspired its design. Because of its anti-counterfeit design, in fact, the peso was extremely popular during the 19th century.
It’s no surprise, then, that many global currencies took their design cues from the peso. These include the Hong Kong dollar, the Japanese yen, and the Chinese yuan.
Getting the best deal for Mexican pesos
So how can you get the best exchange rate when converting to pesos?
For tourists, you have a lot of options. You can use airport kiosks, ATMs (cajeros automaticos), currency exchange offices, or just your credit card. You can also order MXN from your bank before you even leave home.
Out of these options, you’re likely to get the best fees from an ATM or credit card. However, you’ll need to let your card issuer know that you’ll be out of the country. Otherwise, your bank may think that you’re a victim of identity theft and block your card.
And you’ll want at least some cash on you. Medium and smaller shops likely won’t accept a credit card. Don’t forget to break big bills whenever you can. Anything over $200 pesos is considered large, and many vendors won’t be willing or able to provide change for a note that big.
Sending money to Mexico
If you live abroad, sending money to Mexico can be expensive because of exchange rate markups and hidden fees.
At Remitly, we do things a bit differently. When you use our app to send to Mexico from the U.S., at the time of writing, you’ll find a flat fee for any transfers of $500 USD or less when you use your debit card. Everything above that is fee-free.
And with our coverage across Mexico, from coast to coast, your recipients can pick up cash from familiar locations. These include OXXO, Elektra, Bancoppel, and more. You can also send directly to a Mexican bank account or debit card.