The official currency of Belize is the dollar. The dollar has been the currency since 1873, when the country was a British colony known as British Honduras. The original authority for the currency of Belize was the Belize Board of Commissioners of Currency, operating from 1894 to 1976. This was replaced by the Monetary Authority of Belize in 1976 as the first attempt at a national bank after Belize gained political independence from the U.K. in 1963. The current monetary authority in Belize is the Central Bank of Belize, which was established in 1982 as an improvement over the former national bank. The goal of the Central Bank of Belize is clearly stated in the law that created it: to foster monetary stability of the exchange rate and promote credit conditions for the growth of the country within the context of prevailing economic policy. Although the Belize dollar is tied to the U.S. dollar, the Central Bank of Belize was modeled on the Bank of England. The bank’s duties include providing banking services to the government, issuing currency, regulating commercial banks, and guiding the government’s economic policies.
In the 19th century, British Honduras used the Spanish dollar as its currency, but the British banned the use of the Spanish dollar in an attempt to extend the reach of the pound sterling. After the silver crises of 1873, the British Honduras dollar was introduced in an attempt to return to the gold standard. The first coins were minted in 1885, and the first bank notes were printed in 1894. However, the country officially reverted to the sterling system briefly during World War II, even though the dollar and pound sterling were pegged to each other. In 1949, after returning to a U.S. dollar peg, a sudden devaluation of the pound sterling against the U.S. dollar caused some turmoil in the country ultimately leading to the devaluation of the British Honduras dollar. A sympathetic peg to the pound sterling was maintained until 1978 when Belize switched back to a U.S. dollar peg of 2 BZD: 1 USD, which is still maintained today.
Belize dollars are issued by the Central Bank of Belize as coins and banknotes. Only those coins and banknotes issued by the Central Bank after being established in 1983 are legal tender.