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The Scandinavian Monetary Union ( ) was a monetary union formed by Sweden
Sweden

Sweden , officially the Kingdom of Sweden , is a Nordic countries on the Scandinavian Peninsula in Northern Europe. Sweden has land borders with Norway to the west and Finland to the northeast, and it is connected to Denmark by the ?resund Bridge in the south....
 and Denmark
Denmark

Denmark is a Scandinavian country in northern Europe and the senior member of the Kingdom of Denmark. It is the southernmost of the Nordic countries....
 on May 5, 1873 by fixing their currencies
Currency

A currency is a Medium of exchange, facilitating the trade of goods and/or Service s. It is coins and paper bills used as money. It is one form of money, where money is anything that serves as a medium of exchange, a store of value, and a standard of value....
 against gold
Gold standard

The gold standard is a monetary system in which a region's common media of exchange are paper notes that are normally freely convertible into pre-set, fixed quantities of gold....
 at par to each other. Norway
Norway

Norway , officially the Kingdom of Norway, is a constitutional monarchy in Northern Europe that occupies the western portion of the Scandinavian Peninsula....
, which was in union
Union between Sweden and Norway

The Union between Sweden and Norway , was the union of the kingdoms of Sweden and Norway between 1814 and 1905, when they were united under one monarch in a personal union, following the Treaty of Kiel, the declaration of Norway in 1814, a Swedish campaign against Norway , the Convention of Moss, on August 14, 1814, and the Norwegian constitu...
 with Sweden, however with full inner autonomy, entered the union two years later, in 1875 by pegging its currency to gold at the same level as Denmark and Sweden, 2.48 kroner/kronor per gram of gold, or roughly 0.403 grams per krone/krona.






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The Scandinavian Monetary Union ( ) was a monetary union formed by Sweden
Sweden

Sweden , officially the Kingdom of Sweden , is a Nordic countries on the Scandinavian Peninsula in Northern Europe. Sweden has land borders with Norway to the west and Finland to the northeast, and it is connected to Denmark by the ?resund Bridge in the south....
 and Denmark
Denmark

Denmark is a Scandinavian country in northern Europe and the senior member of the Kingdom of Denmark. It is the southernmost of the Nordic countries....
 on May 5, 1873 by fixing their currencies
Currency

A currency is a Medium of exchange, facilitating the trade of goods and/or Service s. It is coins and paper bills used as money. It is one form of money, where money is anything that serves as a medium of exchange, a store of value, and a standard of value....
 against gold
Gold standard

The gold standard is a monetary system in which a region's common media of exchange are paper notes that are normally freely convertible into pre-set, fixed quantities of gold....
 at par to each other. Norway
Norway

Norway , officially the Kingdom of Norway, is a constitutional monarchy in Northern Europe that occupies the western portion of the Scandinavian Peninsula....
, which was in union
Union between Sweden and Norway

The Union between Sweden and Norway , was the union of the kingdoms of Sweden and Norway between 1814 and 1905, when they were united under one monarch in a personal union, following the Treaty of Kiel, the declaration of Norway in 1814, a Swedish campaign against Norway , the Convention of Moss, on August 14, 1814, and the Norwegian constitu...
 with Sweden, however with full inner autonomy, entered the union two years later, in 1875 by pegging its currency to gold at the same level as Denmark and Sweden, 2.48 kroner/kronor per gram of gold, or roughly 0.403 grams per krone/krona. An equal valued krone/krona of the monetary union replaced the three legacy currencies at the rate of 1 krone/krona = ½ Danish rigsdaler
Danish rigsdaler

The rigsdaler was the name of several currencies used in Denmark until 1873. The similarly named Reichsthaler, riksdaler and rijksdaalder were used in Germany and Austria-Hungary, Sweden and the Netherlands, respectively....
 = ¼ Norwegian speciedaler
Norwegian speciedaler

The speciedaler was the currency of Norway between 1816 and 1875. It replaced the Norwegian rigsdaler at par and was subdivided into 120 skilling ....
 = 1 Swedish riksdaler
Swedish riksdaler

The riksdaler was the name of a Sweden coin first minted in 1604. Between 1777 and 1873, it was the currency of Sweden. The daler, like the dollar, was named after the German Thaler....
. The monetary union was one of the few tangible results of the Scandinavian political movement
Scandinavism

Scandinavism and Nordism are literary and political movements that support various degrees of cooperation between the Scandinavian or Nordic countries....
 of the 19th century.

The union provided fixed exchange rates and stability in monetary terms, but the member countries continued to issue their own separate currencies. Even if not initially foreseen, the perceived security led to a situation where the formally separate currencies were accepted on a basis of "as good as" the legal tender
Legal tender

Legal tender or forced tender is payment that, by law, cannot be refused in settlement of a debt.Legal tender is variously defined in different jurisdictions....
 virtually throughout the entire area.

Upon acceding to the union Sweden had the name of its currency changed from Riksdaler Riksmynt to Swedish krona
Swedish krona

The krona has been the currency of Sweden since 1873. It is locally abbreviated kr. The plural form is kronor and one krona is subdivided into 100 ?re ....
. The Danish krone
Danish krone

The krone is the currency of Denmark, including the autonomous provinces of Greenland and the Faroe Islands. The krone is pegged to the euro via the European Union's exchange rate mechanism....
 was already the name of the Danish currency and when Norway joined they also had a Norwegian krone
Norwegian krone

The krone is the currency of Norway. The plural form is kroner. It is subdivided into 100 ?re . The ISO 4217 code is NOK, although the common local abbreviation is kr....
. The word "krone
Krone

Krone may refer to:...
/krona
Krona

Krona may refer to:In monetary units, where krona and its variants mean crown:* Danish krone* Faroese kr?na* Icelandic kr?na...
" literally means "crown
Crown (headgear)

A crown is the traditional symbolic form of headgear worn by a monarch or by a deity, for whom the crown traditionally represents Political power, legitimacy, Crown of Immortality, righteousness, victory, Roman triumph, resurrection, honour and glory of life after death....
", and the differences in spelling of the name represent the differences between the Scandinavian languages.

In 1905 the political union between Sweden and Norway was dissolved, but this did not affect the basis for co-operation in the monetary union. It was instead the outbreak of World War I
World War I

World War I, or the First World War , was a global military conflict which involved the Great powers, organized into two opposing military alliances: the Allies of World War I and the Central Powers....
 in 1914 that brought an end to the monetary union. Sweden abandoned
Fiat currency

Fiat currency is money that exists because an authority or custom declares it to be money. . It achieves value because a government requires it in payment of taxes and says it can be used to pay debt or buy goods and services and because people trust that the value of the currency will be reasonably stable....
 the tie to gold on August 2, 1914 and without a fixed exchange rate the free circulation came to an end.

All three countries still use the same currencies
Currency

A currency is a Medium of exchange, facilitating the trade of goods and/or Service s. It is coins and paper bills used as money. It is one form of money, where money is anything that serves as a medium of exchange, a store of value, and a standard of value....
 as during the monetary union, but they lost their peg, one to one, in 1914. The Icelandic króna
Icelandic króna

The kr?na is the currency of Iceland. The kr?na is technically subdivided into 100 aurar , but in practice this subdivision is no longer used....
 is a derivative of the Danish krone, established after Iceland
Iceland

Iceland, officially the Republic of Iceland , is an island country located in the North Atlantic Ocean between mainland Europe and Greenland....
 was elevated to a separate kingdom in union with Denmark in 1918. Iceland cut its ties to Denmark in 1944 and became a republic.

See also


Economics

  • Economy of Denmark
    Economy of Denmark

    With very few natural resources, the economy of Denmark relies almost entirely on human resources. The service sector makes up the vast amount of the employment and economy....
  • Economy of Norway
    Economy of Norway

    Although sensitive to global business cycles, the economy of Norway has shown robust growth since the start of the Industrial Revolution. Shipping has long been a support of Norway's export sector, but much of Norway's economic growth has been fueled by an abundance of natural resources, including petroleum exploration and production, hydr...
  • Economy of Sweden
    Economy of Sweden

    The Sweden economy is modern and highly industrialised. It has a modern distribution system, excellent internal and external communications, and a skilled labor force....
  • Monetary policy of Sweden
    Monetary policy of Sweden

    The Monetary policy of Sweden is decided by Sveriges Riksbank, the central bank of Sweden. The monetary policy is instrumental in determining how the Swedish currency, is valued....


Banks

  • Skandinaviska Banken
    Skandinaviska Banken

    Skandinaviska Banken, literally the Scandinavian Bank, was a Sweden bank founded in Gothenburg, 1864. Its foundation coincided with the political aspirations of the Scandinavian movement, which sought to unite Sweden, Norway and Denmark into a single kingdom....
  • Sveriges Riksbank
    Sveriges Riksbank

    Sveriges Riksbank, or simply Riksbanken, is the central bank of Sweden and the world's oldest central bank. It is sometimes called the Swedish National Bank or the Bank of Sweden...


Currencies before the union

  • Danish rigsdaler
    Danish rigsdaler

    The rigsdaler was the name of several currencies used in Denmark until 1873. The similarly named Reichsthaler, riksdaler and rijksdaalder were used in Germany and Austria-Hungary, Sweden and the Netherlands, respectively....
  • Norwegian rigsdaler
    Norwegian rigsdaler

    The rigsdaler was the unit of currency used in Norway until 1816 and in Denmark until 1873. The similarly named Reichsthaler, riksdaler and rijksdaalder were used in Germany and Austria-Hungary, Sweden and the Netherlands, respectively....
  • Norwegian speciedaler
    Norwegian speciedaler

    The speciedaler was the currency of Norway between 1816 and 1875. It replaced the Norwegian rigsdaler at par and was subdivided into 120 skilling ....
  • Swedish riksdaler
    Swedish riksdaler

    The riksdaler was the name of a Sweden coin first minted in 1604. Between 1777 and 1873, it was the currency of Sweden. The daler, like the dollar, was named after the German Thaler....


Currencies during and after the union

  • Danish krone
    Danish krone

    The krone is the currency of Denmark, including the autonomous provinces of Greenland and the Faroe Islands. The krone is pegged to the euro via the European Union's exchange rate mechanism....
  • Norwegian krone
    Norwegian krone

    The krone is the currency of Norway. The plural form is kroner. It is subdivided into 100 ?re . The ISO 4217 code is NOK, although the common local abbreviation is kr....
  • Swedish krona
    Swedish krona

    The krona has been the currency of Sweden since 1873. It is locally abbreviated kr. The plural form is kronor and one krona is subdivided into 100 ?re ....