Hernando de Cortes overthrew the Aztec Empire between 1519 and 1521. Mexico was the Viceroyalty of New Spain from 1535 until it gained its independence from Spain on September 28, 1821. During this period, New Spain included not only Mexico, but most of the western United States and Central America.
The Aztecs used copper ingots and cocoa beans for money. On May 11, 1535, a decree called for the minting of coins in Mexico with 1 Escudo equal to 2 Pesos or 16 Reales. Gold escudos, silver reales and copper maravedis were struck, but the minting of copper coins was later discontinued. Instead, silver Reales were cut into bits creating small change. This was the first mint to operate in the new world. Similar Escudo (XESE) coins were later minted in Lima (1598), Potosi (1650), Santa Fe de Bogota (1665) and Guatemala (1701). The silver Mexican Peso/Piastre/Dollar (XMSD) was introduced in 1732 as a trade coin and was used in most countries bordering the Pacific. Each year the silver was shipped from Acapulco to Manila where the trade with China was conducted. Over 3 billion coins were minted in Mexico between the Sixteenth and Nineteenth Centuries.
After gaining its independence, Mexico continued to use the silver Peso (MXP), though more nationalistic designs were introduced. The Peso was officially decimalized on March 15, 1861, but it wasn't fully decimalized in practice until 1898. Some of the local mints were slow in decimalizing and the Chinese, who were the principal consumers of Mexican pesos were slow to accept the decimalized coins. Because of the decline in the value of silver during the late nineteenth century, Mexico adopted the gold standard in 1905 with 1 Peso equal to 50 US cents. Nevertheless, Mexico continued to mint silver Pesos for export to China until 1949, even though the coins were dated 1898.
Although the Mexican Government issued coins, state banks issued banknotes. Mexico fell into monetary chaos during the Mexican Revolution when the contending factions issued currency to pay for the war. These issues included the “Inconvertible” Paper Money (MXI) that quickly depreciated until it took 100 Inconvertible Paper Pesos to get 1 Silver Peso. Mexico returned to a silver standard in 1916 and officially adopted the Mexican Peso on November 13, 1918. Mexico left the Gold Standard on July 25, 1931. The Banco de Mexico began issuing banknotes on September 1, 1925 and gained a monopoly over banknote issue on September 11, 1937. The Peso is divisible into 100 Centavos.
On January 1, 1993, a new Peso (MXN) was introduced equal to 1000 old Pesos. The Mexican Unidad de Inversion (MXV) is an inflation-adjusted mechanism set by the Central Bank of Mexico according to the variation in the Mexican Consumer Price Index. The value of the UDI is expressed in terms of Mexican Pesos per UDI. It is used to denominate mortgage loans, some bank deposits with Maturities of 3 months or more, and Government Bonds (UDIBONOS)
