Gold has been regarded as a particularly secure means of payment at least since the legendary King Croesus introduced gold coins in 560 BC. Gold became a currency and, over the course of history, was used to stabilize fiat currencies. The British Empire officially established the classical gold standard with the Coin Act of 1816. Finally, in 1944, the Bretton Woods system was introduced as a more flexible form of the classical gold standard. But this, too, was abandoned worldwide in 1971 due to the expansion of the money supply in member states. Worldwide? Not quite: one small country in the heart of Europe kept the gold standard alive until the turn of the millennium.
Switzerland was the last country to end the Gold Standard, in 1999
It was not until 28 years after every other nation had abandoned the link between its currency and gold — and thereby shifted to pure fiat currencies — that Switzerland decided to end the 40 percent gold backing of the Swiss franc that had applied until then. Until that point, the Swiss National Bank (SNB) had maintained at least a partial gold backing for exactly the reason other nations abandoned theirs: the gold-backing requirement enforced a more disciplined monetary policy and made it harder to expand the money supply. Starting in early summer 2000, the SNB began reducing part of its gold reserves.
Was reducing the gold reserves a mistake?
As sound as the SNB's decision was to give up the 40 percent gold backing of the Swiss franc, its decision to sell off a significant portion of its gold reserves may, in hindsight, look far less wise. The Swiss newspaper “Tagesanzeiger” put it this way in late 2025: this may have been the most costly misjudgment in Swiss history. The reasoning behind that claim is the fact that the gold price has risen 678 percent in francs since the turn of the millennium. In euros, the increase is even steeper, at 1,263 percent. That said, the Swiss remain exceptionally well stocked with gold: according to a late-2024 report by Swiss broadcaster SRF, Switzerland holds private gold wealth of 115 grams per capita (excluding jewelry), on top of which comes the SNB's gold holdings of 118 grams per capita — by far the largest gold wealth per capita in the world.