What Is a Franc? Its History and Modern Usage
Learn about the franc, a currency with a deep historical legacy and diverse modern uses across various global economies.
The franc is a historical and contemporary unit of currency used across various nations, primarily in Europe and Africa. While its presence has diminished in some regions due to currency reforms, it continues to serve as a national currency in others.
The Swiss Franc
The Swiss Franc (CHF) is the official currency of Switzerland and Liechtenstein. Its stability and reputation as a safe-haven currency make it a preferred choice for investors during periods of economic uncertainty. Switzerland’s political neutrality, combined with low inflation rates and strong fiscal policies, contributes to the franc’s consistent strength.
The Swiss National Bank (SNB) issues banknotes in denominations of 10, 20, 50, 100, 200, and 1,000 francs. Swissmint mints coins in values of 5, 10, and 20 centimes, as well as 0.5, 1, 2, and 5 francs. The ISO 4217 currency code for the Swiss Franc is CHF, and it is commonly symbolized as “Fr.” or “SFr.”
Francs in Africa
Several African nations use variations of the franc as their official currency. The prominent CFA Franc exists in two distinct forms: the West African CFA franc (XOF) and the Central African CFA franc (XAF). Although both are commonly referred to as the CFA franc and maintain the same value against the Euro, they are not interchangeable and operate in separate monetary zones. The West African CFA franc is used by eight countries, including Benin, Burkina Faso, and Senegal, while the Central African CFA franc serves six nations such as Cameroon and Gabon.
Both CFA francs have a fixed exchange rate to the Euro, guaranteed by the French Treasury, with 1 Euro equaling 655.957 CFA francs. This peg, which was previously to the French Franc, aims to provide monetary stability within these regions. Beyond the CFA franc, other independent franc currencies exist in Africa, including the Comorian Franc (KMF) and the Djiboutian Franc (DJF). The Comorian Franc is similarly pegged to the Euro, while the Djiboutian Franc maintains a fixed exchange rate against the U.S. Dollar.
Francs of the Past
Many European countries once used the franc as their national currency before transitioning to the Euro. The French Franc, for instance, had a long history and was the official currency of France until January 2002. It was subdivided into 100 centimes and was available in various coin and banknote denominations.
Similarly, the Belgian Franc and the Luxembourgish Franc were the official currencies of Belgium and Luxembourg, respectively. These currencies circulated in various physical forms. Both the Belgian and Luxembourgish Francs were replaced by the Euro on January 1, 1999, for non-cash transactions, with physical Euro banknotes and coins entering circulation in 2002. The conversion rate for both was fixed at 1 Euro equaling 40.3399 units of their respective francs.