Gold franc
The gold franc was the unit of account for the Bank for International Settlements from 1930 until April 1, 2003.[1] It was replaced with the Special Drawing Right. It was originally based on the Swiss franc, and remained at the value the Swiss franc was pegged (0.290g fine gold) after the Swiss franc came off the gold standard.[2]
The gold franc was used in the Anglo-French Condominium of the New Hebrides (now Vanuatu) as the currency in which the joint administration's postal service denominated its stamps. This added to the already confused situation in which the Australian dollar and the New Hebrides franc were used in normal trade (and in which even the pound sterling turned up the columns of earlier joint administration budgetary documents).
[edit] Gold Franc Initiative
On March 9, 2011, a parliamentary initiative was deposited in the National Council of Switzerland to institute a gold franc as additional currency for Switzerland:
The Confederation institutes an official gold franc with a set of coins of different denominations, each having a fixed gold content. It regulates the concessions granted to the licensees authorized to mint coins; minting coins is not taxable.[3]
This initiative is to be examined by the Committee for Economic Affairs and Taxation. Unlike the pre-2003 version, this gold franc would be defined as 0.1 gram of fine gold.[4] The initiative does not remove, replace or peg the existing Swiss franc, therefore both the gold franc and the Swiss franc would coexist side-by-side. Due to the fixed metallic content of the gold franc, its exchange rate with the Swiss franc would go up and down according to market supply and demand, like any other free-floating currency.
The gold franc is intended to become a safe-haven currency that will divert international capital flows in times of financial crises away from the Swiss franc.[5] A prototype of the future 10 gold francs coin was presented to the media by Thomas Jacob, president of the Gold Franc Association.[6] [7]
The gold franc is completely independent from the gold reserves of the Swiss National Bank. It will be minted only by Swiss commercial banks, under the supervision of the Swiss Confederation. Institution of the gold franc would make it easier for small savers to invest in gold, as one gold franc would be worth only around $6 at August 19, 2011 prices; whereas the standard one-kilogram gold bar was worth around $60,000 at the same time.[3]
[edit] References
- ^ Bank for International Settlements, 2000-2009 Chronology.
- ^ Bank for International Settlements, 66th Annual General Meeting.
- ^ a b Swiss Parliament Initiative 11.407 (in French).
- ^ Wall Street Journal MarketWatch, Swiss Parliament to discuss gold franc.
- ^ Bilan, Parliamentary initiative to launch the "gold franc" (in French).
- ^ 20 Minuten, Gold Franc as Nest Egg for the World? (in German).
- ^ Tele M1, Here comes the Gold Franc! (video in German).
[edit] External Links
- Gold Franc Association - coordinating the efforts to introduce the gold franc as additional currency in Switzerland.
