Cayman Islands Dollar (KYD)

What is the Cayman Islands Dollar (KYD)?

The Cayman Islands dollar (KYD) is the official currency of the Cayman Islands, a British Overseas Territory located in the western Caribbean Sea. The territory consists of three islands: Grand Cayman, Cayman Brac, and Little Cayman. 

It is often abbreviated with the dollar sign, $, but sometimes denoted as CI$ to differentiate it from other currencies that use a variation of the dollar and are only used in the Cayman Islands.

The U.S. dollar is a tradeable currency in the Islands. It is commonly used for transactions by international tourists when paying for hotels, retail store shopping, and other tourism-related expenses.

It currently (August 2022) trades at 1 USD for 0.80 KYD, but only for bills, as the remaining change is typically given in KYD.

The Islands largely depends on revenue from its financial services industry and tourism and solely funds its economic growth. 

This group of islands does not impose direct taxes on its people, especially the corporate income tax, a policy to encourage business growth and stimulate financial activity within the islands since not paying taxes helps them offshore banking services. 

For instance, investors are motivated by the Islands’ tax-friendly policy, where owning a subsidiary firm allows the organization to profit without incurring any tax liabilities on their earnings. 

Although the Islands do not impose heavy taxes, they still have duty taxes on most imports.

History of the KYD

The Cayman Islands were first discovered by Christopher Columbus in 1503 and have been ruled by various governments ever since. 

Before it became a British Overseas Territory, it depended on Jamaica, another Caribbean country. 

Governmental control was considered somewhat loose, whereas the Islands were internally self-governing. However, in 1863, the Cayman Islands were formally considered a dependency of Jamaica, which the English later invaded. 

The Currency Committee of the Islands was established to ponder the possibility of issuing Cayman currency. 
Jamaica took its independence in 1962, and thus the Islands were separated from Jamaica. However, they chose to stay under the British Crown, and approximately a decade later, they introduced their currency, the KYD. 

The Currency Law of 1971 was behind the establishment of the Islands Currency Board, which was tasked with the duty of issuing and redeeming the currency, among other policymaking.  

Henceforth, the Currency Board issued the KYD, which replaced the Jamaican dollar at par and stopped being a legal tender in August of 1972. 

In April 1974, the Law was revised and became the Currency Law of 1974 which led to pegging the Islands dollar to the U.S. dollar at a fixed exchange rate of 1 KYD = 1.2 USD, a rate that is still valid.

In 1983, the Law was revised again and replaced by the Currency Law Revised, which was then replaced by Section 22 of the Monetary Authority Law in 2013. This revision declared that the Governor decides on the value of the Cayman currency against the U.S. dollar. 

The Cayman Islands Monetary Authority (CIMA) was established in January 1997. It took over as the standalone authority responsible for the functions previously governed by the Currency Board, including issuing the currency. 

KYD Banknotes

There is an image of Her Majesty Queen Elizabeth II on the front side of each banknote and the Cayman Islands Coat of Arms and Motto on the backside of each bill. The Cayman Islands’ paper currency was printed by Thomas De La Rue and Company Limited in England.

The denominations of the banknotes of KYD used today are not all the same values as they were first introduced into circulation when the currency was released in 1971. 

Below is a timeline of the revisions and changes in values of the banknotes released:

All banknotes continue to be accepted as legal currency in the Islands, but the older ones, specifically those from the “A” to “C” series, are no longer being circulated today. However, a relatively small number of notes are kept aside and can be purchased.

KYD Latest Issue

Each denomination of banknotes in this issue includes a particular color scheme and design with various illustrations on the front and back and key security features. 

The following brief YouTube video exhibits the new version of the KYD and its features:

As per CIMA’s Brochure on the design and security features of this issue, the descriptions are as follows:

• The $1 note is mainly sea blue with streaks of violet and orange. There is an image of an angel fish on the front side, and the back side shows the Bluff, a cliffside on Cayman Brac.
• The $5 note also features a dark green with an olive and bright shade. A hawksbill turtle is illustrated on the front side and the Cayman Parrot on the back.
• The $10 note is mainly pink with violet and dark gray streaks. It highlights land crabs on the front, and the wild banana orchid is depicted on the back. 
• The $25 note is dark brown, with a few areas covered with light brown and orange colors. It exhibits shells on one side and the hawksbill turtle on the backside. 
• The $50 note is decorated in dark purple with shades of light purple, dark green, and red. Stingrays make up the design on both sides. 
• The $100 note is overall orange with brown and red spots. The front has an image of the Cayman Schooner, a sailing vessel on the front, while on the back is an image of the Financial Center. 

Common security features for the front of each banknote include:

1. Transparency: lifting the note to a light source reveals the complete image, where each banknote value has a unique picture.
2. Serial Number: there is a unique number on the upper left and the lower right corners, where the font size of the digits gradually increases.
3. Turtle Watermark: lifting the note to the light reveals a watermark of a turtle 
4. Signatures: The signatures of the Minister of Finance and Managing Director are printed near the center.
5. Latent image: holding the note up at a shallow angle to the light shows the numeric value of the banknote.
6. Mask: The denomination is shown after lifting the note to the light.

However, there are some differences in the features found on the $1, $5, and $10 notes compared to the $25, $50, and $100 banknotes. They include:

• In addition to the features outlined above, the $1, $5, and $10 notes also have:
  • Electrotype: After lifting the note to the light, “CIMA” appears to be written horizontally
  • Security Thread: A 1.44mm security thread is outlined with the text “CIMA.”
  • Iridescent Band: Tilting the note reveals the shiny band near the middle

• Meanwhile, the $25, $50, and $100 notes have:
  • Electrotype: “CIMA” is displayed vertically instead of horizontally
  • Holographic stripe: Tilting the note showcases one image moving in the background in a holographic manner

On the back side of the paper currency, there are two main features present on each banknote, regardless of value, which are:

1. The transparency described for the front

2. Gemini: when holding the note up in daylight, this feature looks to have one color, while facing it to ultraviolet light shows two colors

Only one difference exists where the $1, $5, and $10 banknotes have a turtle watermark on the backside. In addition, the $25, $50, and $100 notes have a 0.75 embedded thread for security.

KYD Coins

The Cayman Islands dollar is divided into one hundred cents, and the coins are released in values of 1¢, 5¢, 10¢, and 25¢. The company that mints the coins has changed over the years, as detailed in the timeline below:

• 1972-1977: the first issue was released until the British Royal Mint minted the coins in 1977
• 1977-1984: the coins were produced by Franklin Mint, the U.S.A.
• 1986-2019: the coins were minted by The Royal Mint, which is another company that mints coins for the United Kingdom. 

The 1¢ coins were bronze, while the other values were composed of cupronickel. However, in 1992, bronze coins were replaced by copper-plated steel, and nickel-plated steel was used instead of cupronickel.  

All denominations exhibit an image of Her Majesty Queen Elizabeth II on the front side. However, each denomination shows a different image on the backside. Three different sculptors produced the image of Her Majesty Queen Elizabeth II over the years:

• Arnold Machin made the portrait on the coins that were produced before 1986.
• Rafael Maklouf was behind the updated image in 1986.
• Ian Rank-Broadley designed the portrait in 1999. 

The design on the backside stayed the same since the first issuance of coins and captured the icons outlined below:

• 1¢: a thrush bird sitting on a tree branch 
• 5¢: a crayfish
• 10¢: a hawksbill turtle
• 25¢: a two-masted Cayman Schooner

Conclusion

The Cayman Islands dollar stands as a symbol of the territory's economic stability and prosperity. With its peg to the U.S. dollar and a history rooted in the islands' governance and development, the currency reflects the unique blend of British influence and Caribbean heritage.

The continuous evolution of banknotes and coins showcases the commitment to modernization and security in financial transactions, bolstering confidence among residents and visitors alike.

As the Cayman Islands continue to navigate the challenges and opportunities of the global economy, the strength and resilience of the KYD remain pivotal.

With a focus on sustainable growth and strategic fiscal policies, the territory aims to maintain its position as a leading financial hub and tourist destination in the Caribbean region.

Through prudent management and innovation in currency design and regulation, the Cayman Islands reaffirm their commitment to prosperity and progress for generations to come.

Free Resources

To continue learning and advancing your career, check out these additional helpful WSO resources:

• Currency Pair
• Central Bank
• Commercial Bank
• Inflation
• National Currency