The krona is the official currency of Sweden but is often referred to as a crown in English since that is the English translation of krona. The krona is a decimal currency with one krona equal to 100 ore. However, ore is used only for accounting purposes and electronic transactions. All cash transactions are rounded to the nearest krona. The krona became the official currency of Sweden in 1873, replacing the riksdaler. The purpose for introducing the krona was to fix the Swedish, Danish and Norwegian currencies against gold while remaining equal to each other. This was known as the Scandinavian Monetary Union and lasted until the beginning of World War I. Even though the Scandinavian Monetary Union dissolved, all three countries retained the same currency names even though the currencies were officially separated.
Krona was originally issued as a series of coins. Ore coins in denominations of 1, 2 and 5 were bronze, and denominations of 10, 25 and 50 ore were silver. The 1-krona and 2-krona coins were also silver, but coins in denominations of 10 and 20 krona were gold. The gold coins were only minted from 1881 to 1902 and again from 1920 to 1925. In 1972, a 5-krona coin was introduced. By 2009, minted of all ore coins had ceased, and they were no longer accepted as legal tender after October 2010. Banknotes in krona denominations were issued in 1874. The original values were 1, 5, 10, 50, 100 and 1000 krona. Today, banknotes are issued in denominations of 20, 50, 100, 500 and 1000 krona with a 200-krona note forthcoming.
The exchange rate of the krona has historically been manipulated through various monetary policies put into place by Sweden. In 1992, a managed floating exchange system was set up for the krona, and the currency remained stable against the Euro from 2002 to 2008 when the krona sharply declined. By 2011, the krona had again recovered.
In 1995, Sweden signed the accession treaty. This treaty requires the country to convert its national currency to the euro when all economic conditions of the country have been met. However, in official preliminary polls, 56 percent of Swedish voters were opposed to converting to the euro. Sweden has been using a loophole to keep from converting to the euro until a time when the government sees fit. One requirement of conversion is to adopt the ERM II exchange system for a minimum period of two years. By voluntarily using a different exchange mechanism, Sweden is not required to convert.