The balboa replaced the Colombian peso in 1904 following the country's independence. With the exception of a fluctuation in 2016, the balboa has been tied to the United States dollar at an exchange rate of 1:1 since its introduction and has always circulated alongside dollars. Panama has never had an official central bank. The National Bank of Panama, one of two government-owned banks, was responsible for nonmonetary aspects of central banking in Panama, assisted by the National Banking Commission, which was created along with the country's International Financial Center, and was charged with licensing and supervising banks.
Coins
Current
Obsolete
In 1904, silver coins in denominations of, 5, 10, 25, and 50 centésimos were introduced. These coins were weight-related to the 25-gram 50 centésimos, making the -centésimos coin 1.25 grams. Its small size led to it being known as the "Panama pill" or the "Panama pearl". In 1907, copper-nickel - and -centésimo coins were introduced, followed by copper-nickel 5-centésimo coins in 1929. In 1930, coins for,, and balboa were introduced, followed by 1 balboa in 1931, which were identical in size and composition to the corresponding U.S. coins. In 1935, bronze 1-centésimo coins were introduced, with 1¼-centésimo pieces minted in 1940. In 1966, Panama followed the U.S. in changing the composition of their silver coins, with copper-nickel-clad and balboa, and.400 fineness ½ balboa. One-balboa coins, at.900 fineness silver, were issued that year for the first time since 1947. In 1973, copper-nickel-clad -balboa coins were introduced. 1973 also saw the revival of the -centésimos coin, which had a size similar to that of the U.S. half dime, but these were discontinued two years later due to lack of popular demand. In 1983, 1-centésimo coins followed their U.S. counterpart by switching from copper to copper-plated zinc. Further issues of the 1-balboa coins have been made since 1982 in copper-nickel without reducing its size. Modern 1-, 5-centésimo, -, -, and -balboa coins are the same weight, dimensions, and composition as the U.S. cent, nickel, dime, quarter, and half dollar, respectively. In 2011, new 1-balboa bimetallic coins were issued that are the same dimensions as the U.S. dollar coin. In addition to circulating issues, commemorative coins in denominations of 5, 10, 20, 50, 75, 100, 150, 200, and 500 balboas have also been issued.
Banknotes
In 1941, President Arnulfo Arias pushed the government to enact Article 156 to the constitution, authorizing official and private banks to issue paper money. As a result, on 30 September 1941, El Banco Central de Emisión de laRepública de Panamá was established. The bank was authorized to issue up to 6,000,000 balboas' worth of paper notes, but only 2,700,000 balboas were issued on 2 October 1941. A week later, Ricardo Adolfo de la Guardia Arango replaced Arias as president in a coup supported by the United States. The new government immediately closed the bank, withdrew the issued notes, and burned all unissued stocks of same. Very few of these so-called "Arias Seven-Day" notes escaped incineration.
