The Commonwealth of Puerto Rico is an island nation in the Caribbean situated between the Dominican Republic and the U.S Virgin Islands. This unincorporated territory of the United States is about 1,600 kilometers southeast of Miami, Florida. The archipelago consists of the main island and some smaller islands including Mona, Culebra, and Vieques.
In 1493, the nation was colonized by Spain. Despite being disputed by other European powers, Puerto Rico remained a territory of Spain. In 1898, Spain ceded Puerto Rico to the United States with the Treaty of Paris ending the Spanish-American war. Puerto Rico’s identity that’s focused on a mix of indigenous, European, and African descent began to come into view in the 19th century.
Puerto Rico possesses a diverse economy that relies on the industrial sector for its economic activity and revenue. Agriculture is also an integral part of the country’s financial activities with the production of dairy and livestock products as the backbone, surpassing sugar production. Tourism is also among the economic drivers with estimated arrivals of over 3.6 million tourists in 2008.
As an autonomous community of Spain and an unincorporated territory of the US, Puerto Rico was allowed to use currencies from both countries. Initially, it used its own gold as its monetary, however, during the 16th century, the country ran out of gold reserves. To protect its economy, the Situado Mexicano was shipped by the Viceroyalty of New Spain to Puerto Rico. Still, the economy suffered, therefore, the archipelago began producing its own banknotes in 1766, making it the first Overseas Province to produce 8-real paper bills in the Spanish Empire.
The situado was discontinued during the 19th century, causing economic distress that prompted the introduction of the Puerto Rican peso banknotes but printing was stopped from 1815.
After the Spanish-American war ended on August 13, 1898, the country began using the Puerto Rican dollar as its currency which is at the same rate as the United States dollar. In 1916, the currency was withdrawn from circulation and was redeemed for those currencies issued by the United States Treasury.