LThe cordobization policy in Nicaragua has been promoted by the Central Bank of Nicaragua (BCN) with the goal of reducing the country鈥檚 dependence on the U.S. dollar in economic transactions. As of January 1, 2025, all payments within national territory must be made in c贸rdobas, including credit and debit card transactions. This measure aims to reinforce monetary sovereignty and stabilize the financial system. This article analyzes cordobization from a legal standpoint, considering the applicable regulations and the potential consequences of non-compliance.
Legal Framework of Cordobization
The Organic Law of the Central Bank of Nicaragua (Law No. 732) establishes that the BCN is responsible for executing the Government鈥檚 monetary and exchange policy. Accordingly, the decision to implement the cordobization of the economy is based on Article 36 of said law, which provides that the c贸rdoba is the only legal tender in the country (Central Bank of Nicaragua, 2025).
Additionally, the Law on the Protection of the Rights of Consumers and Users prohibits pricing in foreign currencies, which further strengthens the legality of the measure (National Assembly of Nicaragua, 2023). Consequently, commercial establishments and financial institutions are required to adapt their billing and payment systems to the exclusive use of c贸rdobas.
Legal Implications of Cordobization
The implementation of cordobization raises several legal challenges:
- Adaptation of Contracts and Financial Obligations:
Contracts previously expressed in U.S. dollars must be adjusted to c贸rdobas. This transition may lead to legal disputes regarding the applicable exchange rates and the conversion of monetary values under the new legal framework (Garc铆a, 2024). - Impact on the Banking System:
The obligation to conduct all payments in c贸rdobas directly affects the operation of U.S. dollar accounts, potentially creating uncertainty among depositors and impacting the overall financial stability of the country (Central Bank of Nicaragua, 2025). - Compliance and Penalties:
The regulation requires that businesses and financial institutions update their payment systems to process transactions exclusively in c贸rdobas. Failure to comply with this requirement may result in administrative and financial penalties.
Penalties for Non-Compliance with Cordobization
Non-compliance with the cordobization policy may result in several penalties, including:
- Administrative Fines:
Businesses that continue charging in U.S. dollars may be penalized with fines proportional to the value of the transactions conducted in foreign currency (Central Bank of Nicaragua, 2025). - Temporary Business Closures:
In cases of repeated violations, the authorities may impose temporary suspension of commercial activities on businesses that fail to adjust their billing systems to c贸rdobas (National Assembly of Nicaragua, 2023). - Criminal Liability:
Where non-compliance is deemed a serious violation of the national financial system, those responsible may face criminal proceedings for refusing to comply with monetary regulations or disrupting the economic order established by the Government (Garc铆a, 2024). - Revocation of Business Licenses:
Financial institutions and businesses that persist in conducting transactions in dollars may face the revocation of their operating licenses, particularly if there is evidence of an intentional effort to circumvent current regulations (Central Bank of Nicaragua, 2025).
While cordobization seeks to strengthen the national currency and reduce dependency on the U.S. dollar, its success will ultimately depend on the public鈥檚 trust in the c贸rdoba and the country鈥檚 economic stability. From a legal perspective, this policy is supported by the current legislation; however, its implementation will require significant adjustments across the financial and commercial sectors to prevent legal and economic disputes.
Francisco Cerda
Partner
