50 Centavos – Guatemala

In 1922, Guatemala's currency situation was defined by the instability of the paper peso and the government's decisive move toward the gold standard. Following a period of excessive printing to finance deficits, the paper peso had severely depreciated, losing public confidence and causing inflation. This monetary weakness was a legacy of the long Manuel Estrada Cabrera regime (1898-1920) and posed a significant challenge for the new administration of President José María Orellana, which took office in late 1921.

To resolve the crisis, the Orellana government enacted the Monetary Law of November 26, 1922. This pivotal legislation established the gold standard, making the quetzal the new national currency, with its value fixed at one quetzal equal to one United States dollar. The law mandated that the quetzal be backed by at least 50% gold reserves, ensuring convertibility and discipline. The old depreciated paper pesos were exchanged for quetzales at a rate of 60 pesos to 1 quetzal, a dramatic revaluation that aimed to wipe out the inflationary overhang.

The reform of 1922 was fundamentally successful, creating a stable and trusted currency that endured for decades. The quetzal's peg to the U.S. dollar facilitated foreign investment and trade, particularly with the crucial United States market, during a boom in coffee exports. While the stabilization required strict fiscal austerity, it laid the foundation for Guatemala's modern financial system and the quetzal remains the nation's currency today, a testament to the lasting impact of the 1922 reforms.