Swiss franc

The Swiss franc, or simply the franc, is the currency and legal tender of Switzerland and Liechtenstein. It is also legal tender in the Italian exclave of Campione d'Italia, which is surrounded by Swiss territory. The Swiss National Bank issues banknotes and the federal mint Swissmint issues coins.
It is also designated through the currency signs Fr., fr., or CHF, which stands for Confoederatio Helvetica Franc. These initials also serve as the ISO 4217 currency code, used by banks and financial institutions.
The smaller denomination, a hundredth of a franc, is a Rappen in German, centime in French, centesimo in Italian, and rap in Romansh.
The official symbols Fr. and fr. are widely used by businesses and advertisers, including in English. However, according to Art. 1 SR/RS 941.101 of the federal law collection, the internationally official abbreviation – regardless of the national languages – is CHF, which is also to be used in English; respective guides also request that the ISO 4217 code be used. The use of SFr. for Swiss Franc and fr.sv. are outdated. As previously indicated, the Latinate "CH" stands for Confoederatio Helvetica; given the different languages used in Switzerland, Latin is used for language-neutral inscriptions on its coins.

History

Before the Helvetic Republic

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, denominations and monetary systems. However, the origins of a majority of these currencies can be traced to either the French livre tournois or the South German gulden of the 17th century. The new Swiss currencies emerged in the 18th century after Swiss cantons did not follow the pace of depreciations which occurred in France and Germany. However, they mostly existed only in small change as they were little more than community currency, current in one canton but not in the other, and foreign coins like French francs and kronenthalers were more recognized as currency all over Switzerland.
A high-level summary of existing currencies at the end of the 18th century is shown below, including their equivalents in terms of the French écu of 26.67 g fine silver, the South German kronenthaler of 25.71 g fine silver, and Swiss francs of 4.5 g fine silver.

Unit	Origin	Units per écu	Units per kronenthaler	CHF per unit
Bern livre	livre	4.00	3.90	1.465 F
Geneva livre	livre	3.643	3.536	1.616 F
South German gulden	gulden	2.80	2.70	2.116 F
Zurich gulden	gulden	2.50	2.45	2.332 F
Central Swiss gulden	gulden	3.00	2.925	1.954 F

The livre of Bern and most western Swiss cantons like Basel, Aargau, Fribourg, Vaud, Valais, Lausanne, Neuchâtel and Solothurn originated from the French livre tournois.

The livre was divided into 20 sols, 10 batzen or 40 kreuzer.
After 1690, 30 Bern batzen equated to either
* a German Reichsthaler worth 2 gulden or 120 kreuzer, or
* a French Louis d'Argent, equivalent to the Spanish dollar, worth 3 livres tournois or 60 sols.
After 1726, the French écu of g fine silver was valued at 4 livres or 40 batzen.
After 1815, the German kronenthaler of g fine silver was valued at 3.9 livres or 39 batzen.
This livre or of écu was the model for the frank of the Helvetic Republic of 1798–1847.
Currencies identical to this standard include the Berne thaler, Basel thaler, Fribourg gulden, Neuchâtel gulden, Solothurn thaler and Valais thaler.

Geneva had its own currency, the florin petite monnaie, with florins equal to the livre courant. After 1641, the Spanish dollar was worth florins or 3 livres. Afterwards, the écu was valued at florins or livres, while the kronenthaler was valued at florins or livres. See also Geneva thaler and Geneva genevoise.
Many currencies of central and eastern Switzerland originated from the South German gulden. It was divided into 40 schilling or 60 kreuzer, and the thaler was worth 2 gulden. After 1690, this gulden was worth a Reichsthaler specie, or 12.992 g fine silver. After 1730, the different guilders of Southern Germany and Switzerland fragmented under varying rates of depreciation. The South German gulden, worth a Cologne mark of fine silver, also applied to the Swiss cantons of St. Gallen, Appenzell, Schaffhausen and Thurgau. The French écu was valued at 2.8 gulden, while the kronenthaler was valued at 2.7 gulden. See St. Gallen thaler.
The cantons of Zurich, Schwyz and Glarus, however, maintained a stronger gulden worth a Cologne mark of fine silver. The French écu was valued at gulden, while the kronenthaler was valued at gulden; see Zürich thaler and Schwyz gulden. On the other hand, the central Swiss cantons of Luzern, Uri, Zug and Unterwalden maintained a weaker gulden vs the South German gulden. The French écu was valued at 3 gulden, while the kronenthaler was valued at gulden.

Helvetic Republic to Regeneration, 1798–1847

In 1798, the Helvetic Republic introduced the franc or frank, modelled on the Bern livre worth the écu, subdivided into 10 batzen or 100 rappen . It contained grams of fine silver and was initially worth livres tournois or 1.48 French francs.
This franc was issued until the end of the Helvetic Republic in 1803, but served as the model for the currencies of several cantons in the Mediation period. These 19 cantonal currencies were the Appenzell frank, Argovia 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.
After 1815, the restored Swiss Confederacy attempted to simplify the system of currencies once again. As of 1820, a total of 8,000 distinct coins were current in Switzerland: those issued by cantons, cities, abbeys, and principalities or lordships, mixed with surviving coins of the Helvetic Republic and the pre-1798 Helvetic Republic. In 1825, the cantons of Bern, Basel, Fribourg, Solothurn, Aargau, and Vaud formed a monetary concordate, issuing standardised coins, the so-called Konkordanzbatzen, still carrying the coat of arms of the issuing canton, but interchangeable and identical in value. The reverse side of the coin displayed a Swiss cross with the letter C in the center.
Despite these efforts, the situation remained complex. Before the introduction of the Swiss franc, seventy-two different entities issued currency. Daily payments were made with small coins, known as billons, which varied from canton to canton and were not necessarily accepted from one canton to another.

Franc of the Swiss Confederation, 1850–present

The Konkordanzbatzen among the Swiss cantons agreeing on an exclusive issue of currency in francs and batzen failed to replace the over 8,000 different coins and notes in circulation. Despite introduction of the first Swiss franc, the South German kronenthaler became the more desirable coin to use in the 19th century, and it was still quoted in pre-1798 currency equivalents. Furthermore, less than 15% of Swiss money in circulation was in local currency, since French and German gold and silver trade coins proved to be more desirable means of exchange. A final problem was that the first Swiss franc was based on the French écu which was being phased out by France in the 19th century.
To solve this problem, the new Swiss Federal Constitution of 1848 specified that the federal government would be the only entity allowed to issue 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 Swiss franc was introduced at par with the French franc, at 4.5 g fine silver or g = 0.29032 g fine gold. The currencies of the Swiss cantons were converted to Swiss francs by first restating their equivalents in German kronenthaler of grams fine silver, and then to Swiss francs at the rate of 7 écu brabant = 40 Swiss francs. The first franc worth th the French écu was converted at 1.4597 Swiss francs.
In 1865, France, Belgium, Italy, and Switzerland formed the Latin Monetary Union, in which they agreed to value their national currencies to a standard of 4.5 grams of fine silver or 0.290322 grams fine gold, equivalent to US$1 = CHF 5.1826 until 1934. Even after the monetary union faded away in the 1920s and officially ended in 1927, the Swiss franc remained on that standard until 27 September 1936, when it suffered its sole devaluation during the Great Depression. Following the devaluations of the British pound, U.S. dollar and French franc, the Swiss franc was devalued 30% to 0.20322 grams fine gold, equivalent to US$1 = CHF 4.37295. In 1945, Switzerland joined the Bretton Woods system with its exchange rate to the dollar fixed until 1970.
The Swiss franc has historically been considered a safe-haven currency, with a legal requirement that a minimum of 40% be backed by gold reserves. However, this link to gold, which dated from the 1920s, was terminated on 1 May 2000 following a referendum, making the franc fiat money. By March 2005, following a gold-selling program, the Swiss National Bank held 1,290 tonnes of gold in reserves, which equated to 20% of its assets.
In November 2014, the referendum on the "Swiss Gold Initiative", which proposed a restoration of 20% gold backing for the Swiss franc, was voted down.