Official Currency Of Switzerland Today In 2019
The official money of Switzerland is called the Swiss Franc. Campione d’Italia and Liechtenstein likewise recognize the Swiss Franc as its national currency. The SNB is the entity that is authorized to produce the bank notes of the Franc. SNB is the abbreviation for Swiss National Bank. However, it is the Swiss mint which produces the coins.
- 1 A Brief History
- 1.1 1798 and the Helvetic Republic
- 1.2 Franc Discontinued
- 1.3 The Period Of The Confederation From 1850 To Present Day
- 1.4 How The Swiss Franc Fell From Grace During The Period Of 2011 – 2014
- 1.5 The SNB Removes The Cap On The Swiss Franc
- 1.6 The Coins Of The Helvetic Republic
- 1.7 The Coins Of The Swiss Confederation
- 2 The Banknotes: How Did Paper Money Come About?
- 3 New Banknotes Plan And Launch Year
A Brief History
The Franc’s currency code is CHF. Have you ever wondered what CHF means? CHF stands for Confoederatio Helvetica. You might come across banks that refer to the Swiss Franc as SFr and the shorter Fr. If you look at the coins closely, you will note that the inscriptions are in Latin.
1798 and the Helvetic Republic
During this period, a total of 75 organizations were tasked to make coins in the country of Switzerland. Included in these collectives were the abbeys and the cantons. These groups made an estimated number of 860 types of coins. Each one of these coins was unique in how they were denominated and valued.
The franc was eventually introduced by the Republic in 1798. It has been estimated by historians that the franc’s value was equal to 1.5 times of the French franc and around 6.75 gms of silver.
It wasn’t long before the franc was discontinued. By 1803, the franc ceased to be circulated. However, the franc was brought back in 1815. This was because the Republic wanted a more organized and efficient system for circulating currencies. There were too many varieties of coins in Switzerland. It was estimated that by the year 1820, more than 8,000 coin variants in Switzerland were used as money.
A standardized set of coins were introduced in 1825. This was referred to as a concordat which was singular in scope. There was also the Konkordanz Batzen. It carried a design that was symbolic of the cantos. On its other side, you can find an interesting depiction of the cross of Switzerland. In its centre, you will find a symbol in the shape of the letter “C”.
The Period Of The Confederation From 1850 To Present Day
The Constitution mandated in 1848 that the only institute that could circulate currency in the country of Switzerland was the government. The Coinage Act was enacted into law two years later. With this came the official recognition of the CHF as the medium of exchange in Switzerland.
Switzerland together with Italy, France, and Belgium founded the Latin Monetary Union in 1865. They unanimously agreed to set the value of their countries’ moneys to the equivalent of 4.5 grams of silver.
The Latin Monetary Union ceased its function by 1927. Still, the franc continued to be set at the same value until 1936. By 1945, the Swiss franc was pegged to the equivalent of the US Dollar. This took place after Switzerland joined the Bretton Woods system.
For some time, many investors in the currency market viewed the franc as a stable and safe investment. This was because the money was not at risk of inflation. Additionally, as much as 40% of the franc’s worth was supported or covered by gold. However, a referendum took place on 01 May 2000 which ended the franc’s link with gold. There was a failed attempt to bring back the franc’s support in gold in a 2014 November referendum.
How The Swiss Franc Fell From Grace During The Period Of 2011 – 2014
The 2011 elections in Greece carried consequences that reverberated throughout Europe. Switzerland was no exception. The value of the franc increased beyond $1.30 and pushed Switzerland to open up the supply of money in an attempt to manage the overvaluation of the currency.
The SNB moved to set the franc at 1.20 to the euro on 6 September 2011. The action was intended to help stabilize Switzerland’s economy. It resulted in the franc being sold massively to hit 1.12 to the euro. Consequently, the franc lost 9% in value against the US Dollar. This was the largest decline of the franc to the euro in its history.
The SNB Removes The Cap On The Swiss Franc
As the euro continued its decline, the SNB decided to remove its cap on the franc on 15 January 2015. Once the franc was allowed to float in the currency market, its value rose to 30% versus the euro. Over time, the euro regained its strength. It was short-lived as the franc increased its value by 21% against the US Dollar and by 23% against the euro.
During this period, many of the country’s largest trading companies lost money. The SNB was severely criticized for its apparent inability to protect investors from volatile market conditions as well as secure the value of its currency.
The Coins Of The Helvetic Republic
From the period of 1798 – 1803, it was estimated that there were over one billion coins circulating. The denominations were as follows: 1 batzen, ½ batzen, and 1 centime. How about the silver coins circulating at the time? Its denominations were as follows: 10, 20, and bratzen 40. The 16, 32 coins were in gold and were circulated in 1800.
The Coins Of The Swiss Confederation
In 1850, there were different denominations of coins that were being circulated. Coins that were denominated higher were produced with billion. The silver content was estimated to range from 5% to around 15%. Meanwhile, coins that were denominated lower used bronze. Silver of the highest quality was used to make the coins from 1860 – 1863. By 1879, the billion was replaced by the cupro- nickel. Another type of gold coins, Vreneli were issued and circulated in 1936.
In World War I as well as World War II saw the release of the brass and zinc coins. The nickel was introduced in 1932 and took over the discontinued cupro- nickel.
Toward the end of the 1960’s, silver started to rise in value. It became expensive. Instead, the coins were sent overseas for melting. It did not matter that having the coins melted overseas were deemed illegal by the government. The practice went on until the franc grew higher than silver in terms of value.
Not much changes were done on the coins’ design from the time they began circulating in 1879.
The Banknotes: How Did Paper Money Come About?
In 1907, the SNB was promulgated to be the only entity that can circulate banknotes. The first series of banknotes featured denominations in 50, 100, 500, and 1000. From there, additional denominations in 5, 10, 20, and 25 banknotes were introduced. The SNB ceased the circulation of the 500 and 200 in 1996.
Jorg Zintzmeyer: The Man Who Designed The SNB Currency
There have been eight series of paper money issued. The SNB commissioned designs that have included themes such as discoveries in science. The latest designs were the creation of Jorg Zintzmeyer.
“Quadrilingual” is how Swiss banknotes are written. This means four languages were used on it. These languages were Italian, German, French, and of course, Swiss.
New Banknotes Plan And Launch Year
A new series of banknotes, the ninth, were planned for 2010. These were under the guise of a contest carried out by the SNB. The contest was promoted with the catch phrase, “Switzerland Open To The World”. Unfortunately, the design that won was not popular and this caused its issuance to be postponed to a later year.
The official launch date of the ninth series was finally set on 2015. Over time, it was disclosed that the new designs for the ninth series would be ready for circulation by April of 2016.
The first one to be circulated was the 50 franc note. This was on 12 April 2016. The second design to be released was the 20 franc banknote which as on 17 May 2017. Then five months later, on 18 October 2017, the 10 franc made its debut. The SNB then disclosed that the other banknotes would be circulated either bi-annually or annually. It is hoped that all of the new designs for the banknotes would be in full circulation by 2019.