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Swiss franc
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The franc (German: Franken, French and Romansh: franc, Italian: franco; code: CHF) is the currency and legal tender of Switzerland and Liechtenstein; it is also legal tender in the Italian exclave Campione d'Italia. Although not formally legal tender in the German exclave Büsingen (the sole legal currency is the euro), it is widely used on a day-to-day basis. The Swiss National Bank issue bank notes and the federal Swissmint issues coins.
The Swiss franc is the only version of the franc still issued in Europe.
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Encyclopedia
The franc (German: Franken, French and Romansh: franc, Italian: franco; code: CHF) is the currency and legal tender of Switzerland and Liechtenstein; it is also legal tender in the Italian exclave Campione d'Italia. Although not formally legal tender in the German exclave Büsingen (the sole legal currency is the euro), it is widely used on a day-to-day basis. The Swiss National Bank issue bank notes and the federal Swissmint issues coins.
The Swiss franc is the only version of the franc still issued in Europe. The smaller denomination, a hundredth of a franc, is a Rappen (Rp.) in German, centime (c.) in French, centesimo (ct.) in Italian, and rap (rp.) in Romansh. The ISO code of the currency used by banks and financial institutions is CHF, although "Fr." is used by most businesses and advertisers; some use SFr.; the Latinate "CHF" denotes Confoederatio Helvetica franc, because Latin is used as the neutral language representing country given its tetralingual populace. The Swiss franc is the fifth-most-traded currency in the foreign exchange market after the US dollar, the euro, the Japanese yen and the pound sterling.
History
First franc, 1798–1803
Before 1798, about 75 entities were making coins in Switzerland, including the 25 cantons and half-cantons, 16 cities, and abbeys, resulting in about 860 different coins in circulation, with different values and denominations. See Basel thaler, Berne thaler, Fribourg gulden, Geneva thaler, Geneva genevoise, Luzern gulden, Neuchâtel gulden, St. Gallen thaler, Schwyz gulden, Solothurn thaler, Valais thaler, Zug schilling and Zürich thaler.
In 1798, the Helvetic Republic introduced a currency based on the French franc, subdivided into 10 batzen or 100 rappen. The Swiss franc was equal to 6¾ grams pure silver or 1½ French francs. This Franc was issued until the end of the Helvetic Republic but served as the model for the currencies of several cantons in the re-formed Swiss Confederacy. For these cantonal currencies, see Aargau frank, Appenzell frank, Basel frank, Berne frank, Fribourg frank, Geneva franc, Glarus frank, Graubünden frank, Luzern frank, St. Gallen frank, Schaffhausen frank, Schwyz frank, Solothurn frank, Thurgau frank, Ticino franco, Unterwalden frank, Uri frank, Vaud franc and Zürich frank.
Second franc, 1850-
Although 22 cantons and half-cantons issued coins between 1803 and 1850, less than 15% of the money in circulation in Switzerland in 1850 was locally produced, with the rest being foreign, mainly brought back by mercenaries. In addition, some private banks also started issuing the first banknotes, so that in total, at least 8000 different coins and notes were in circulation at that time, making the monetary system extremely complicated.
In order to solve this problem, the new Swiss Federal Constitution of 1848 specified that the Federal Government would be the only entity allowed to make money in Switzerland. This was followed two years later by the first Federal Coinage Act, passed by the Federal Assembly on 7 May 1850, which introduced the franc as the monetary unit of Switzerland. The franc was introduced at par with the French franc. It replaced the different currencies of the Swiss cantons, some of which had been using a franc (divided into 10 batzen and 100 rappen) which was worth 1½ French francs.
In 1865, France, Belgium, Italy, and Switzerland formed the Latin Monetary Union, where they agreed to change their national currencies to a standard of 4.5 grams of silver or 0.290322 grams of gold. Even after the monetary union faded away in the 1920s and officially ended in 1927, the Swiss franc remained on that standard until 1936, when it suffered its sole devaluation, on 27 September during the Great Depression. The currency was devalued by 30% following the devaluations of the British pound, U.S. dollar and French franc. In 1945, Switzerland joined the Bretton Woods system and pegged the franc to the U.S. dollar at a rate of $1 = 4.30521 francs (equivalent to 1 franc = 0.206418 grams of gold). This was changed to $1 = 4.375 francs (1 franc = 0.203125 grams of gold) in 1949.
Between mid-2003 and mid-2006, its exchange rate with the euro had been stable at a value of about 1.55 CHF per euro, so that the Swiss Franc has risen and fallen in tandem with the euro against the U.S. dollar and other currencies. In March 2008 the Swiss Franc traded above one U.S. dollar for the first time.
The Swiss franc has historically been considered a safe haven currency with virtually zero inflation and a legal requirement that a minimum 40% be backed by gold reserves. However, this link to gold, which dates from the 1920s, was terminated on 1 May 2000 following a referendum regarding the Nazi gold affair with Swiss banks and an amendment to the Swiss Constitution. By March 2005, following a gold selling program, the SNB held 1,290 tonnes of gold in reserves which equated to 20% of their assets.
Coins
First franc
Between 1798 and 1803, bullion coins were issued in denominations of 1 rappen, ½ and 1 batzen. Silver coins were issued for 5, 10, 20 and 40 batzen, with the 40 batzen also issued with the denomination given as 4 francs. Gold 16 and 32 franc coins were issued in 1800.
Second franc
In 1850, coins were introduced in denominations of 1, 2, 5, 10, and 20 centimes and ½, 1, 2, and 5 francs, with the 1 and 2 centimes struck in bronze, the 5, 10, and 20 centimes in billon, and the franc denominations in .900 fineness silver. Between 1860 and 1863, .800 fineness silver was used, before the standard used in France of .835 fineness was adopted for all silver coins except the 5 francs (remained .900 fineness) in 1875. In 1879, billon was replaced by cupro-nickel in the 5 and 10 centimes and by nickel in the 20 centimes. In 1883, gold 20 francs coins were introduced, followed by 10 francs in 1911. Gold was struck for circulation until 1935.
Both world wars only had a small effect on the Swiss coinage, with brass and zinc coins temporarily being issued. In 1931, the size of the 5 francs coin was reduced from 25 grams to 15, with the silver content reduced to .835 fineness. The next year, nickel replaced cupro-nickel in the 5 and 10 centimes. Cupro-nickel was restored to these denominations in 1940, following the switch to cupro-nickel 20 centimes in 1939.
In the late 1960s, due to linkage to the devaluing U.S. dollar, the prices of internationally traded commodities rose significantly. A silver coin's material value exceeded its monetary value, and many were being sent abroad for melting, which prompted the federal government to make this practice illegal. The statute was of little effect, and the melting of francs only subsided when the collectible value of the remaining francs again exceeded their material value. In 1968, cupro-nickel replaced silver in all four denominations. The 2 centimes coin was discontinued in 1974, with aluminium-brass replacing cupro-nickel in the 5 centimes.
The 1 centime coin was still produced until 2006, albeit in ever decreasing quantities, but it did not play any great role in the monetary economy in the fourth quarter of the twentieth century (circa 1975 to 2000). People and groups who could justify the use of 1 centime coins for monetary purposes could obtain them at face value; any other user (such as collectors) had to pay an additional 4 centimes per coin to cover the production costs, which had exceeded the actual face value of the coin for many years. The coin fell into disuse in the late 1970s and early 1980s but only officially was fully withdrawn from circulation and declared to be not legal tender as of 1 January 2007. The long-forgotten 2 centime coin, not minted since 1974, was demonitized in the early 1980s.
The 5 centime coin remains in use, in circulation and still legal tender for the time being notwithstanding the production cost of 11 centimes per coin. One of the main reasons why the Confederation can not allow the elimination of this coin, is pricing of goods and services as well as and possibly more due to the fact that a second class stamp costs 85 centimes at present. Swiss Post are looking into the possibility of a price rise or the elimination of the second class service which could ultimately pave the way for the elimination of the 5 centime coin therewith.
The designs of the coins have changed very little since 1879. Among the notable changes were new designs for the 5 francs in 1888, 1922, 1924 (minor) and 1931 (mostly just a size reduction). A new design for the bronze coins was used from 1948. Coins depicting a ring of stars (such as the 1 franc coin seen beside this paragraph) were modified from 22 stars to 23 stars in 1983; since the stars represent the Swiss cantons, it was updated to represent the 1979 expansion of the Swiss federation, when Jura seceded from the Canton of Bern and became the 23rd canton.
All Swiss coins are language-neutral (at least with respect to Switzerland's four national languages), featuring only numerals, the abbreviation "Fr." for franc, and the Latin phrases "Helvetia" or "Confœderatio Helvetica" (depending on the denomination).
In addition to these general circulation coins, numerous series of commemorative coins have been issued, as well as gold coins including the well-known Vreneli. These coins generally remain legal tender, but are not used as such because their material or collector's value usually exceeds their face value.
| Overview of current Swiss coins |
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| Value | Diameter
(mm) | Thickness
(mm) | Weight
(g) | Composition | Remarks |
|---|
| 1 centime | 16 | 1.10 | 1.5 | Bronze | No longer legal tender as of 01.01.2007. | | 5 centimes | 17.15 | 1.25 | 1.8 | Aluminium bronze | Made in Cupronickel or pure Nickel until 1980 | | 10 centimes | 19.15 | 1.45 | 3 | Cupronickel | Made in current minting since 1879 | | 20 centimes | 21.05 | 1.65 | 4 | Cupronickel | | 1/2 franc
(50 centimes) | 18.20 | 1.25 | 2.2 | Cupronickel | In silver until 1967 | | 1 franc | 23.20 | 1.55 | 4.4 | Cupronickel | In silver until 1967 | | 2 francs | 27.40 | 2.15 | 8.8 | Cupronickel | In silver until 1967 | | 5 francs | 31.45 | 2.35 | 13.2 | Cupronickel | In silver until 1967 and in 1969. |
Banknotes
In 1907, the Swiss National Bank took over the issuance of banknotes from the cantons and various banks. It introduced denominations of 50, 100, 500 and 1000 francs. 20 francs notes were introduced in 1911, followed by 5 francs in 1913. In 1914, the Federal Treasury issued paper money in denominations of 5, 10 and 20 francs. These notes were issued in three different version: French, German and Italian. The State Loan Bank also issued 25 francs notes that year. In 1952, the National Bank ceased issuing 5 francs but introduced 10 francs notes in 1955. In 1996, 200 francs notes were introduced whilst the 500 francs was discontinued.
Eight series of banknotes have been printed by the National Bank, six of which have been released for use by the general public. The sixth series from 1976, designed by Ernst and Ursula Hiestand, depicted personalities of the world of science.
It has been recalled and replaced and will lose any value on 1 May 2020. As of 2006, a large number of notes from this series has not yet been exchanged, even though it has not been legal tender for more than 5 years; for example, the value of 500 francs banknotes still in circulation represents 167.4 millions Swiss Francs.
The seventh series was printed in 1984, but kept as a "reserve series", ready to be used if, for example, wide counterfeiting of the current series suddenly happened. When the Swiss National Bank decided to develop new security features and to abandon the concept of a reserve series, the details of the seventh series were released and the printed notes were destroyed.
The current, eighth series of banknotes was designed by Jörg Zintzmeyer around the theme of the arts and released starting in 1995. In addition to a new design, this series was different from the previous one on several counts. Probably the most important difference from a practical point of view was that the seldom-used 500 franc note was replaced by a new 200 francs note; this new note has indeed proved more successful than the old 500 francs note. The base colours of the new notes were kept similar to the old ones, except the 20 francs note which was changed from blue to red to prevent a frequent confusion with the 100 francs note, and the 10 francs note which was changed from red to yellow. The size of the notes was changed as well, with all notes from the 8th series having the same height (74 mm); while the widths were changed as well, still increasing with the value of the note. The new series contains many more security features than the previous one; many (but not all) of them are now visibly displayed and have been widely advertised, in contrast with the previous series where most of the features were kept secret.
| 8th (current) series of Swiss banknotes |
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| Image | Value | Dimensions | Main Colour | Obverse | Date of issue | Remarks |
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| Obverse | Reverse |
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| | | 10 francs | 126 × 74 mm | Yellow | Le Corbusier | 8 April 1997 | | | | | 20 francs | 137 × 74 mm | Red | Arthur Honegger | 1 October 1996 | | | | | 50 francs | 148 × 74 mm | Green | Sophie Taeuber-Arp | 3 October 1995 | | | | | 100 francs | 159 × 74 mm | Blue | Alberto Giacometti | 1 October 1998 | | | | | 200 francs | 170 × 74 mm | Brown | Charles Ferdinand Ramuz | 1 October 1997 | Replaces the 500 francs
banknote in the previous series | | | | 1000 francs | 181 × 74 mm | Purple | Jacob Burckhardt | 1 April 1998 | | |
All banknotes are quadrilingual, displaying all information in the four national languages. The banknotes depicting a Germanophone display German and Romansch on the same side as their picture, whereas banknotes depicting a Francophone or an Italophone display French and Italian on the same side as their picture.
When the 5th series lost its validity, at the end of April 2000, the banknotes that had not been exchanged represented a total value of 244.3 million Swiss francs; in accordance with Swiss law, this amount was transferred to the Swiss Fund for Emergency Losses in the case of non-insurable natural disasters.
In February 2005, a competition was launched for the design of the 9th series planned to be released around 2010 on the theme Switzerland open to the world. The results were announced in November 2005, but the selected design drew widespread criticisms from the population.
Circulation
As of December 2005, the total value of released Swiss coins and banknotes was 43,834.99 million Swiss francs.
| Value of Swiss coins and banknotes in circulation as of December 2005 (in millions of CHF) |
|---|
| Coins | 10 francs | 20 francs | 50 francs | 100 francs | 200 francs | 500 francs | 1000 francs | Total |
|---|
| 2468.45 | 611.29 | 1293.11 | 1798.46 | 7977.21 | 6280.35 | 167.39 | 23,238.84 | 43,834.99 |
Combinations of up to 100 usual Swiss coins (not including special or commemorative coins) are legal tender; banknotes are legal tender for any amount.
Reserve currency
See also
External links
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