The first Bank Notes issued in Gibraltar date back to 1914. These
Bank Notes were issued under emergency wartime legislation -
Ordinance 10 of 1914. The position was well summarised in a Minute
dated 2 February 1925 written to the Colonial Secretary by the
Gibraltar Government Treasurer, The Hon W A Bowring JP, which reads
"At the outbreak of the war in 1914 notes designated as 'Bank Notes'
were issued by the Government of Gibraltar to assist the
Anglo-Egyptian Bank to meet its liabilities in the event of a run
either on its own institution or the Government Savings Bank."
In 1914, there was indeed a run on the bank and the Government was
compelled to make an emergency issue of notes.
Alongside the Anglo-Egyptian Bank Notes in circulation in Gibraltar
at the time were British Territory Notes. British Territory Notes
were readily accepted by the public and had an advantage over the
local Bank Notes in that - in the words of the then Secretary of
State - "they can be supplied to passing ships and are well
recognised as readily negotiable paper in adjacent foreign
countries". (Extract from a Despatch dated 2 January 1925 from The
Right Honourable L S Amery, Secretary of State - Colonial Office,
Downing Street - to the Governor of Gibraltar General Sir Charles
Following this initial issue of Bank Notes, it was on 21 October
1915 when the Secretary of State, in his Despatch No 108, formally
approved the arrangements for the issue of currency notes by the
Government of Gibraltar. However, new legislation in the form of the
Currency Notes Ordinance was not enacted until 1927.
The Monetary Unit of Gibraltar is actually Sterling. The UK's
Coinage Acts of 1870 to 1946 as well as the Decimal Currency Acts of
1967 and 1969 applied to Gibraltar by proclamation. Gibraltar's
Currency Notes Ordinance did not create a separate currency but
conferred on the Government of Gibraltar the authority to print
currency notes, which were legal currency in Gibraltar.
Sterling Currency Notes issued by the Bank of England have therefore
been legal tender and in circulation in Gibraltar alongside the
local note issues, since these early days. The Government of
Gibraltar has always tried to encourage the use of the local
currency and to increase the notes in circulation figure.
Any issue of local currency notes to the banks requires a deposit of
equivalent value to be made to the Government. These deposits are
invested in the 'Note Security Fund' and the investment income is an
important source of income for the Government.
In July 2010, the Gibraltar Government announced the issue of a new series
of Gibraltar currency notes. There are five currency notes in the series
£5, £10, £20, £50 and for the first time a £100 note. Also launched into
circulation is the new £5 coin showing Her Majesty, the Queen of Gibraltar.
At the launch of the new notes the Chief Minister, who is also the Finance
Minister, stated that there is no such currency as the 'Gibraltar Pound' or GIP,
the official currency is, and has been, the Pound Sterling.