The Swiss Franc is the official currency of the nations of Switzerland and Liechtenstein and Campione d’Italia, an Italian municipality. Although many European countries had their own version of the Franc at one time, after the advent of the euro, the Swiss Franc remained the only one still in use. The Swiss Franc was introduced in 1798. The purpose of its introduction was to unify and standardize the monetary system of the country. Before 1798, no fewer than 75 different entities in Switzerland were minting around 860 different coins, many of which used completely separate monetary systems. This time in Swiss history marked the beginning of the Helvetic Republic, a governmental system meant to impose a central authority over the country. The Helvetic Republic would only last until 1803 and the franc was no longer issued after that, but the idea of the Swiss Franc would endure.
Over the next 50 years, the monetary system of the country fell into disarray, and 85 percent of transactions were carried out with foreign currency. This was remedied after the new Swiss Federal Constitution was adopted. In 1850, the Federal Coinage Act was enacted, and a new Swiss franc was introduced at a one-to-one ratio with the French franc. Fifteen years later, Switzerland became part of the Latin Monetary Union with Belgium, France and Italy in order to standardize exchanges between their four national currencies. This union lasted until 1927 but Switzerland kept with the standard until 1936. After the World Wars, the Swiss Franc was pegged to the U.S. dollar under the Bretton Woods system.
The Swiss franc, today, is a highly traded currency. It has a value that remains stable with the rise and fall of the euro and the U.S. dollar, and on several occasions beginning in 2008, the Swiss franc traded above one USD. The Swiss franc is considered a safe-haven currency because inflation rates are almost non-existent. It was a requirement that 40 percent of Swiss francs be backed by gold reserves. This requirement was eliminated in 2000, but as of 2005, Switzerland still held gold reserves equal to 20 percent of the nation’s assets.