Official Currency In Switzerland Today In 2018
The Swiss Franc is the national currency and the official medium of exchange of Switzerland. The currency is also considered legal tender by Liechtenstein and Campione d’Italia. The governing body that issues the Swiss Franc banknotes is the SNB or the Swiss National Bank. Its coins are issued by the Swiss mint.
CHF is the currency abbreviation of the Swiss Franc. The abbreviation means Confoederatio Helvetica. However, some banks may use Fr. and SFr. The wordings on the coins are written in Latin.
- 1 History
- 2 SNB Ends The Capping Of The Swiss Franc
1798: The Helvetic Republic
During this time, 75 groups were involved in coin-making in Switzerland. Among these groups were cantons and abbeys that made around 860 varieties of coins. These coins had their own unique values and denominations.
It wasn’t until 1798 that the Republic brought out the franc. The value of the franc at the time was estimated to be equivalent to 6.75gms of silver and 1.5 times that of the French franc.
The franc continued to be in circulation until 1803. It was restored in 1815 in an effort to make the current system for currencies much simpler and efficient. By 1820, there were an estimated 8,000 different coins circulating in Switzerland.
In 1825, a singular concordate was created to issue coins that were more standardized. The Konkordanzbatzen displayed the symbolic design representing the canton. Its reverse side showed the Swiss cross that with a “C” shaped symbol placed in its centre.
1850 to Present: The Confederation of The Swiss
In 1848, the Constitution enacted into law the ruling that only the government was authorized to produce money in Switzerland. Within 1 to 2 years, the government passed the Coinage Act and formally designated the franc as Switzerland’s the official currency.
The Latin Monetary Union was founded in 1865. Its original members were France, Switzerland, Italy and Belgium. These countries collectively agreed to peg the value of their respective currencies to 4.5gms of silver.
In 1927 after the Latin Monetary Union was discontinued, the Swiss franc was pegged to that value up to 1936. The franc was pegged to the United States Dollar in 1945 after Switzerland became part of the Bretton Woods system.
Currency investors have considered the Swiss franc as a “safe” because it was not subject to inflation and 40% of its value was supported by gold. On May 1, 2000 a referendum terminated the currency’s association with gold. Another referendum dated November 2014 which intended to restore 20% of the currency’s backing from gold was denied.
2011 to 2014: The Rise And Fall Of The Swiss Franc
The Greek elections of 2011 shook currency markets. Investors pushed the franc past $1.30 which forced the SNB to increase money supply in an effort to dampen the currency’s overvaluation.
By September 6, 2011, the SNB pegged the franc to 1.20 per euro to stabilize the economy. The move led to massive selling which pushed the franc down to 1.12 per euro and loss of 9% value versus the United States Dollar. All told, the franc fell massively versus the euro which was its largest fall against the currency.
SNB Ends The Capping Of The Swiss Franc
On January 15, 2015, the SNB removed the cap on the Swiss franc. The move was in response to the continuous fall of the euro. Upon letting the franc flow freely, it’s value increased by 30% against the euro. The euro was able to gain lost ground but eventually, the franc gained 23% over the euro and 21% versus the U.S. Dollar.
The volatility of the Swiss franc had resulted in severe financial damage to many large trading houses. This led to many questioning the ability of the SNB to effectively manage market chaos and protect the interest of investors.
Helvetic Republic Coins
Over a billion coins were circulated from 1798 to 1803. These were denominated as 1 centime, ½ and 1 batzen. Silver coins were denominated as 10, 20, and 40 bratzen. In 1800, 16 and 32 franc coins in gold were circulated.
Swiss Confederation Coins
Coins in various denominations were issued in 1850. Lower denominations were crafted in bronze while higher denominations used billion that had a silver content of 5% to 15%. The coins were made with top quality silver during the period 1860 to 1863. The cupro-nickel replaced the billion in 1879. By 1936, Vreneli which were gold coins began to circulate.
Zinc and brass coins were issued during World War I and II. By 1932, the cupro-nickel was replaced by the nickel.
Because the value of silver increased in the latter part of the 1960s, silver coins were melted in overseas locations. Even after the federal government made the activity illegal, it continued until such time the value of the francs became higher than the value of its material.
The coins’ appearance and design went largely unchanged since its introduction in 1879.
History Of The Banknotes
The SNB became the sole authority to issue bank notes in 1907. Initially, the SNB circulated notes that were denominated as 50, 100, 500 and 1,000 francs. During the succeeding years, additional denominations in 5, 10, 20 and 25 franc bank notes were issued. In 1996, the SNB discontinued the 500 and issued the 200 bank note.
SNB Currency Designed By Jorg Zintzmeyer
A total of eight series of bank notes have been circulated by the SNB. The themes ranged from science discoveries to the current ones which were designed by Jorg Zintzmeyer.
Swiss banknotes are described as quadrilingual which means it uses four languages. In addition to Swiss, the other languages are German, Italian and French.
The SNB made a design competition in 2005 for the ninth series of banknotes that were supposed to be issued on 2010. The theme of the design competition was “Switzerland Open to the World”. The winning design was immediately met with criticism and resulted in a delay of the issuance date.
After moving the issuance date from 2012 to 2015, it was eventually announced that the newly-designed banknotes would be circulated on April 2016.
First off, was the 50- franc note on April 12, 2016 followed by the 20- franc banknote on May 17, 2017. The 10-franc was issued on October 18, 2017. It was announced that release of the new banknotes would follow a bi-annual or annual interval schedule. It is estimated that the release of all new banknotes would be settled by 2019.