Understanding the Gibraltar Pound (GIP)
The Gibraltar pound (abbreviated as GIP) is the official currency of Gibraltar. The Gibraltar pound is pegged at par value to the British pound sterling, maintaining a fixed exchange rate.
Key Takeaways
- The Gibraltar pound (GIP) is the official currency of Gibraltar.
- It is pegged to the British pound at a one-to-one ratio.
- Gibraltar’s coins and banknotes are unique to the region and are legal tender only within Gibraltar.
- The Gibraltar pound was formally introduced in 1927 with its own banknotes and in 1988 with its coins.
- Historical currencies of Gibraltar include the Spanish real and the British pound before introducing the GIP.
Diving In: The Utility of the Gibraltar Pound
The Gibraltar pound is issued by the government under the specifications of the 1934 Currency Note Act. Coins are minted in denominations of £1, £2, £5, 1p, 2p, 5p, 10p, 20p, and 50p. Banknotes are circulated in denominations of £5, £10, £20, £50, and £100.
Though similar in labeling to British pounds, the notes and coins have unique designs. These are exclusively recognized as legal tender within Gibraltar but can be traded 1:1 for British pound sterling outside Gibraltar. British coins and notes remain legal tenders in Gibraltar, and many local retail stores accept euros, albeit unofficially.
Gibraltar transitioned to a decimal currency system in 1971, akin to the United Kingdom, simplifying calculations with 1 pound = 100 pence.
Gibraltar’s Economic Evolution
Situated at the southern edge of the Iberian Peninsula, Gibraltar remains a British Overseas Territory. Historically, its economy was anchored by the British military and its naval dockyard. However, reliance on military endeavors has significantly waned, decreasing from 60% of economic activity in 1984 to an estimated 7% today.
Today, Gibraltar’s economy is bolstered by financial services, online gaming, navigation, and tourism. It’s a pivotal port in the Mediterranean, with bunkering (fuel supply to ships) being a major industry.
Historical Context of the Gibraltar Pound
Between 1825 and 1872, Gibraltar’s currency situation was convoluted, employing a hybrid of Spanish, British, and local coins pegged to the Spanish real de plata. After 1872, the Spanish currency was the sole legal tender until the Spanish-American War of 1898 devalued it. Consequently, the British pound was adopted as the official currency. Originally, British coins and notes circulated, but Spanish money remained prevalent.
1927 marked the official inception of the Gibraltar pound, featuring unique banknotes and coins appearing in 1988. These coins, denominated in 1p, 2p, 5p, 10p, 20p, and 50p, alongside £1 coins, displayed intricate designs and symbolic liaison to Gibraltar.
Gibraltar assumed full responsibility for designing, printing, and producing banknotes in 2011, previously a British government duty. Notably, a £100 banknote celebrating Sir Joshua Hassan, the first Chief Minister, was introduced in 2016, featuring the world’s first holographic foil on Safeguard polymer substrate.
Milestones in Gibraltar’s Currency Evolution
- £10 and £20 notes expanded the currency lineup in 1975, followed by £50 notes in 1986.
- A new series of notes emerged in 1995 and 2010-11.
- Two-pound coins were introduced in 1999, showcasing annual designs representing the 12 Labors of Hercules.
- To mark the tercentenary of British Gibraltar (1704-2004), a commemorative series of coins debuted.
- The £5 coin, issued in 2010, was inscribed “Elizabeth II • Queen of Gibraltar.”
Related Terms: British Pound, Currency Note Act, Legal Tender.
References
- Oanda. “Gibraltar Pound”.
- DeLaRue. “HM Government of Gibraltar issues new £100 banknote”.
