El Salvador was conquered for Spain by Pedro de Alvarado in 1525. El Salvador was part of the Captaincy-General of Guatemala within the Vice-Royalty of New Spain until gaining its independence on September 21, 1821. El Salvador was part of Mexico until 1823 when it became a constituent state of the Central American Federation. El Salvador formally became a separate country on February 22, 1841.
Spanish Escudo (XESE) coins were used in El Salvador while it was part of the Vice-Royalty of New Spain. El Salvador had no mint of its own, so most of its coins came from Mexico. The Escudo was divisible into 2 Pesos and 16 Reales. The Central American Escudo/Peso (XCAE) was used while El Salvador was part of the Central American Federation. El Salvador produced its own provisional coins between 1828 and 1835.
After gaining its independence, El Salvador issued the Peso (SVP), divisible into 100 Centavos, at par with the Central American Peso; however, no coins were minted for El Salvador until 1889. El Salvador linked the Peso to the French Franc in 1870 with 1 Peso equal to 5 French Francs. The Colon (SVC) was introduced on September 11, 1919 at par with the El Salvador Peso and equal to 2 US Dollars. El Salvador left the Gold Standard on October 7, 1931.
In November 2000, El Salvador passed La Ley de Integraction Monetaria, which made the United States Dollar legal tender in El Salvador beginning on January 1, 2001. The Central Bank ceased printing Colon banknotes, but allows existing banknotes to circulate until 2003 when the US Dollar will become the sole legal tender within El Salvador.
Eight different private banks issued banknotes in El Salvador at different points in time until June 19, 1934 when the Banco Agricola Commercial was renamed the Banco Central de Reserva de El Salvador and became the sole note-issuing authority in El Salvador. | 
