What Are Francs? A Look at Current and Historical Currencies
Understand the franc, a currency name with a deep historical footprint and diverse modern applications across the globe.
The term “franc” denotes a currency unit adopted by various nations throughout history, and it remains in use today. Its origins often connect to precious metals, which initially underpinned its worth. The widespread adoption of the franc reflects its enduring role in global financial systems across different eras and geographical regions.
Defining the Franc as a Currency Unit
The franc has deep historical roots, notably originating in France during the 14th century. Its name is believed to derive from the Latin phrase “francorum rex,” meaning “King of the Franks,” inscribed on early French coins. Alternatively, it could stem from the Old French word “franc,” signifying “free” or “frank,” reflecting the coin’s liberation from prior monetary standards. The adoption of the “franc” by various countries often resulted from historical alliances, extensive trade networks, or colonial influence.
While sharing the same name, the specific value and characteristics of each “franc” currency varied considerably across different nations. This divergence underscores that the name represented a unit of account rather than a universal, standardized value. Each country independently managed its franc, establishing its own monetary policies and exchange rates. This highlights the adaptability of the franc as a currency concept.
Francs Currently in Circulation
Several franc currencies remain actively used today. The Swiss Franc (CHF) is a prominent example, serving as the official currency of Switzerland and Liechtenstein. It is recognized as a major global currency and a safe-haven asset due to Switzerland’s political stability and conservative monetary policies. The Swiss economy is highly diversified and robust, contributing to the franc’s appeal during global economic uncertainty.
The CFA franc circulates in fourteen African countries, divided into two variants: the West African CFA franc (XOF) and the Central African CFA franc (XAF).
The West African CFA franc is used by Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo.
The Central African CFA franc serves Cameroon, Central African Republic, Chad, Equatorial Guinea, Gabon, and the Republic of the Congo.
Both CFA francs maintain a fixed parity with the Euro, set at an exchange rate of €1 to F.CFA 655.957. This fixed exchange rate and the French Treasury’s guarantee of convertibility reflect their historical ties to France.
The Comorian Franc (KMF) is the official currency of the Comoros, an island nation in the Indian Ocean. It is pegged to the Euro, with a fixed exchange rate of 491.96775 Comorian francs to one Euro, providing stability for the Comorian economy. The Djiboutian Franc (DJF) is the currency of Djibouti, a country in East Africa. It maintains a fixed peg to the United States Dollar, at a rate of 1 USD to 177.72 DJF. This long-standing peg, in place since 1949, contributes to the currency’s stability and facilitates trade and investment.
Major Historical Franc Currencies
Many franc currencies that once played a significant role in global commerce are no longer in circulation, having been replaced by new monetary units. The French Franc (FRF) stands as a prominent example, serving as the national currency of France for centuries. It was integral to the French economy until its replacement by the Euro. The transition to the Euro began with a fixed conversion rate of 6.55957 French francs to one Euro in 1999, and physical French Franc notes and coins were withdrawn from circulation in 2002.
Other European nations also used franc currencies later superseded by the Euro. The Belgian Franc (BEF) and the Luxembourgish Franc (LUF) were the currencies of Belgium and Luxembourg, sharing a historical monetary union. Both were replaced by the Euro on January 1, 1999, with a conversion rate of 40.3399 Belgian francs to one Euro. The Monaco Franc (MCF), used in Monaco, also transitioned to the Euro alongside the French and Belgian Francs.
Beyond Europe, numerous franc currencies were introduced in former French colonies, many replaced by new national currencies following decolonization. The Tunisian Franc was replaced by the Tunisian Dinar in 1960, at a rate of 1,000 francs to one dinar. The Moroccan Franc was replaced by the Moroccan Dirham in 1960, with one dirham equating to 100 francs. The Algerian Franc also ceased to be legal tender after Algeria gained independence in 1962, being replaced by the Algerian Dinar.