½ Real – Guatemala

In 1899, Guatemala's currency situation was characterized by a period of transition and instability, emerging from the economic policies of President José María Reina Barrios. His administration, seeking to modernize the nation and attract foreign investment for ambitious infrastructure projects like railroads, had substantially increased the money supply. This was done primarily through the issuance of unbacked paper currency, known as billetes de curso forzoso (forced circulation notes), which began in 1887. By the late 1890s, this over-issuance led to severe inflation, a loss of public confidence in paper money, and a sharp depreciation against gold and silver coins, which remained the preferred and trusted mediums of exchange.

The situation reached a crisis point following Reina Barrios's assassination in February 1898 and into the early tenure of his successor, Manuel Estrada Cabrera. The paper peso had depreciated to a fraction of its nominal value, causing economic hardship and complicating both domestic trade and international commerce. The government faced a pressing need to stabilize the monetary system, restore fiscal discipline, and establish a currency that could foster long-term economic growth and credibility with foreign creditors and investors.

Consequently, the period around 1899 set the direct stage for a major monetary reform. After years of planning and negotiation, this culminated in the creation of the peso gold standard under the Monetary Law of 1924, which later evolved into the quetzal in 1925. Thus, the currency turmoil of 1899 represents a critical juncture—the final chapter of a failed paper experiment—that ultimately pushed the country toward adopting a hard, gold-backed currency to ensure future stability.