Bermuda dollar
Encyclopedia
The dollar is the currency
of Bermuda
. It is normally abbreviated with the dollar sign
$ or, alternatively, BD$ to distinguish it from other dollar
-denominated currencies. It is subdivided into 100 cent
s. The Bermudian dollar is not normally traded outside of Bermuda.
s, known as pieces of eight
were in widespread use on the world's trading routes, including the Caribbean Sea region. However, following the revolutionary wars in Latin America, the source of these silver trade coins dried up. The last Spanish dollar was minted at the Potosi
mint in 1825. The United Kingdom
had adopted a very successful gold standard in 1821, and so the year 1825 was an opportune time to introduce the British sterling
coinage into all the British colonies. An imperial order-in-council was passed in that year for the purposes of facilitating this aim by making sterling coinage legal tender in the colonies at the specified rating of $1 = 4s 4d (One Spanish dollar to four shillings and four pence sterling). As the sterling silver coins were attached to a gold standard, this exchange rate did not realistically represent the value of the silver in the Spanish dollars as compared to the value of the gold in the British gold sovereign, and as such, the order-in-council had the reverse effect in many colonies. It had the effect of actually driving sterling coinage out, rather than encouraging its circulation.
Remedial legislation had to be introduced in 1838 so as to change over to the more realistic rating of $1 = 4s 2d. However, in Jamaica
, British Honduras
, Bermuda, and later in the Bahamas also, the official rating was set aside in favour of what was known as the 'Maccaroni' tradition in which a British shilling, referred to as a 'Maccaroni', was treated as one quarter of a dollar. The common link between these four territories was the Bank of Nova Scotia which brought in the 'Maccaroni' tradition, resulting in the successful introduction of both sterling coinage and sterling accounts. It wasn't however until 1 January 1842 that the authorities in Bermuda formally decided to make sterling the official currency of the colony to circulate concurrently with Doubloon
s (64 shillings) at the rate of $1 = 4s 2d. Contrary to expectations, and unlike in the Bahamas where US dollars circulated concurrently with sterling, the Bermudas did not allow themselves to be drawn into the U. S. currency area. The Spanish dollars fell away in the 1850s but returned again in the 1870s following the international silver crisis of 1873. In 1874, the Bermuda merchants agreed unanimously to decline to accept the heavy imports of U.S. currency except at a heavy discount, and it was then exported again. And in 1876, legislation was passed to demonetize the silver dollars for fear of them returning. In 1882, the local 'legal tender act' demonetized the gold doubloon, which had in effect been the real standard in Bermuda, and this left pounds, shillings, and pence as the sole legal tender. The British pound sterling then remained the official currency of Bermuda until 1970 when it was finally decided to take the action that British Honduras had already done 85 years earlier. In line with the international trend towards decimalization, Bermuda introduced a new currency in the form of a dollar that was fixed at an equal value to the US dollar which at that time was equal to 8 shilling
s 4 pence
sterling. The new Bermuda dollars operated in conjunction with decimal fractional coinage, hence ending the pounds, shillings, and pence system in that colony in the year before it was ended in the United Kingdom itself. The decision to finally align with the US dollar was at least in part influenced by the devaluation of sterling in 1967 and Bermuda's increasing tendency to keep its reserves in US dollars. Although Bermuda changed to a U. S. based currency and changed the bulk of its reserves from sterling to U. S. dollars in 1970, it still nevertheless remained a member of the sterling area
since at that time, the pound sterling
and the US dollar had a fixed exchange rate of £1 = $2.40. Following the US dollar crisis of 1971 which ended the international Bretton Woods
agreement of 1944, the US dollar devalued, but the Bermuda dollar maintained its link to sterling, hence breaking its parity with the US dollar.
On the 22nd June 1972, the United Kingdom unilaterally ended its sterling area based exchange control laws, hence excluding Bermuda from its sterling area membership privileges. Bermuda responded on 30 June 1972 by amending its own exchange control laws accordingly, such as to impose exchange control restrictions in relation to Bermuda only. At the same time, Bermuda realigned its dollar back to one-to-one with the US dollar and formally pegged it at that rate. As far as UK law was concerned, Bermuda still remained a member of the overseas sterling area until exchange controls were abolished altogether in 1979. For a history of currency in the British West Indies
in general, see British West Indies dollar.
In 1970, coins
were introduced in denominations of 1, 5, 10, 25 and 50 cents. The 1 cent was bronze, with the other coins struck in cupro-nickel
. In 1983, nickel-brass 1 and 5 dollars coins were issued, although the 5 dollars coin was not issued again. The original Bermuda dollar coin was modeled on the pound coin. These coins were unpopular, due to their size and weight and, with the one-dollar note not being removed from circulation, many Bermudians refused to use them. The original one-dollar coin was replaced in 1988 by a new coin, similar to the Canadian dollar coin. This was larger, but thinner. Having learnt from its experience with the first coin, the Bermudian government first fixed a date when the one dollar note would cease to be legal tender, obliging adoption of the new coin, the original one- and five-dollar coins ceasing to be legal tender. Also in 1988, copper-plated steel replaced bronze, and production of the 50-cent coins ceased. In 1991, copper-plated zinc replaced copper-plated steel in the 1 cent.
Bermuda has occasionally released commemorative coins
to celebrate certain events, historical milestones, flora and fauna. These coins bear a face value, but are generally seen more as collector's items
or stores of value
. Notable among these are the so called "Bermuda triangles" which are pressed on special lobed triangular planchets, are minted in gold and silver, and come in denominations divisible by three.
by Arnold Machin
.
The designs are said to feature themes and scenes of maritime Bermuda, and like their predecessors are coloured by value:http://www.bma.bm/uploaded/Posters.pdf
The first $1 million batch of new notes has been slated for release in early 2009.http://www.royalgazette.com/siftology.royalgazette/Article/article.jsp?articleId=7d8bcb730030000§ionId=60
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
of Bermuda
Bermuda
Bermuda is a British overseas territory in the North Atlantic Ocean. Located off the east coast of the United States, its nearest landmass is Cape Hatteras, North Carolina, about to the west-northwest. It is about south of Halifax, Nova Scotia, Canada, and northeast of Miami, Florida...
. It is normally abbreviated with the dollar sign
Dollar sign
The dollar or peso sign is a symbol primarily used to indicate the various peso and dollar units of currency around the world.- Origin :...
$ or, alternatively, BD$ to distinguish it from other dollar
Dollar
The dollar is the name of the official currency of many countries, including Australia, Belize, Canada, Ecuador, El Salvador, Hong Kong, New Zealand, Singapore, Taiwan, and the United States.-Etymology:...
-denominated currencies. It is subdivided into 100 cent
Cent (currency)
In many national currencies, the cent is a monetary unit that equals 1⁄100 of the basic monetary unit. Etymologically, the word cent derives from the Latin word "centum" meaning hundred. Cent also refers to a coin which is worth one cent....
s. The Bermudian dollar is not normally traded outside of Bermuda.
History
For nearly four hundred years Spanish dollarSpanish dollar
The Spanish dollar is a silver coin, of approximately 38 mm diameter, worth eight reales, that was minted in the Spanish Empire after a Spanish currency reform in 1497. Its purpose was to correspond to the German thaler...
s, known as pieces of eight
Pieces of Eight
Pieces of Eight is the eighth studio album and second concept album by Styx, released September 1, 1978.The album was the band's follow-up to their Triple Platinum selling The Grand Illusion album....
were in widespread use on the world's trading routes, including the Caribbean Sea region. However, following the revolutionary wars in Latin America, the source of these silver trade coins dried up. The last Spanish dollar was minted at the Potosi
Potosi, Trelawny, Jamaica
Potosi, located in Trelawny, Jamaica, was named after the fabled Bolivian silver mine and originally belonged to Thomas Partridge of St. James . His son, also named Thomas, inherited the property and on his death ownership passed to his two sisters, including Elizabeth...
mint in 1825. The United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
had adopted a very successful gold standard in 1821, and so the year 1825 was an opportune time to introduce the British sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
coinage into all the British colonies. An imperial order-in-council was passed in that year for the purposes of facilitating this aim by making sterling coinage legal tender in the colonies at the specified rating of $1 = 4s 4d (One Spanish dollar to four shillings and four pence sterling). As the sterling silver coins were attached to a gold standard, this exchange rate did not realistically represent the value of the silver in the Spanish dollars as compared to the value of the gold in the British gold sovereign, and as such, the order-in-council had the reverse effect in many colonies. It had the effect of actually driving sterling coinage out, rather than encouraging its circulation.
Remedial legislation had to be introduced in 1838 so as to change over to the more realistic rating of $1 = 4s 2d. However, in Jamaica
Jamaica
Jamaica is an island nation of the Greater Antilles, in length, up to in width and 10,990 square kilometres in area. It is situated in the Caribbean Sea, about south of Cuba, and west of Hispaniola, the island harbouring the nation-states Haiti and the Dominican Republic...
, British Honduras
British Honduras
British Honduras was a British colony that is now the independent nation of Belize.First colonised by Spaniards in the 17th century, the territory on the east coast of Central America, south of Mexico, became a British crown colony from 1862 until 1964, when it became self-governing. Belize became...
, Bermuda, and later in the Bahamas also, the official rating was set aside in favour of what was known as the 'Maccaroni' tradition in which a British shilling, referred to as a 'Maccaroni', was treated as one quarter of a dollar. The common link between these four territories was the Bank of Nova Scotia which brought in the 'Maccaroni' tradition, resulting in the successful introduction of both sterling coinage and sterling accounts. It wasn't however until 1 January 1842 that the authorities in Bermuda formally decided to make sterling the official currency of the colony to circulate concurrently with Doubloon
Doubloon
The doubloon , was a two-escudo or 32-reales gold coin, weighing 6.77 grams . Doubloons were minted in Spain, Mexico, Peru, and Nueva Granada...
s (64 shillings) at the rate of $1 = 4s 2d. Contrary to expectations, and unlike in the Bahamas where US dollars circulated concurrently with sterling, the Bermudas did not allow themselves to be drawn into the U. S. currency area. The Spanish dollars fell away in the 1850s but returned again in the 1870s following the international silver crisis of 1873. In 1874, the Bermuda merchants agreed unanimously to decline to accept the heavy imports of U.S. currency except at a heavy discount, and it was then exported again. And in 1876, legislation was passed to demonetize the silver dollars for fear of them returning. In 1882, the local 'legal tender act' demonetized the gold doubloon, which had in effect been the real standard in Bermuda, and this left pounds, shillings, and pence as the sole legal tender. The British pound sterling then remained the official currency of Bermuda until 1970 when it was finally decided to take the action that British Honduras had already done 85 years earlier. In line with the international trend towards decimalization, Bermuda introduced a new currency in the form of a dollar that was fixed at an equal value to the US dollar which at that time was equal to 8 shilling
Shilling
The shilling is a unit of currency used in some current and former British Commonwealth countries. The word shilling comes from scilling, an accounting term that dates back to Anglo-Saxon times where it was deemed to be the value of a cow in Kent or a sheep elsewhere. The word is thought to derive...
s 4 pence
Penny
A penny is a coin or a type of currency used in several English-speaking countries. It is often the smallest denomination within a currency system.-Etymology:...
sterling. The new Bermuda dollars operated in conjunction with decimal fractional coinage, hence ending the pounds, shillings, and pence system in that colony in the year before it was ended in the United Kingdom itself. The decision to finally align with the US dollar was at least in part influenced by the devaluation of sterling in 1967 and Bermuda's increasing tendency to keep its reserves in US dollars. Although Bermuda changed to a U. S. based currency and changed the bulk of its reserves from sterling to U. S. dollars in 1970, it still nevertheless remained a member of the sterling area
Sterling Area
The sterling area came into existence at the outbreak of World War II. It was a wartime emergency measure which involved cooperation in exchange control matters between a group of countries, which at the time were mostly dominions and colonies of the British Empire...
since at that time, the pound sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
and the US dollar had a fixed exchange rate of £1 = $2.40. Following the US dollar crisis of 1971 which ended the international Bretton Woods
Bretton Woods system
The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states in the mid 20th century...
agreement of 1944, the US dollar devalued, but the Bermuda dollar maintained its link to sterling, hence breaking its parity with the US dollar.
On the 22nd June 1972, the United Kingdom unilaterally ended its sterling area based exchange control laws, hence excluding Bermuda from its sterling area membership privileges. Bermuda responded on 30 June 1972 by amending its own exchange control laws accordingly, such as to impose exchange control restrictions in relation to Bermuda only. At the same time, Bermuda realigned its dollar back to one-to-one with the US dollar and formally pegged it at that rate. As far as UK law was concerned, Bermuda still remained a member of the overseas sterling area until exchange controls were abolished altogether in 1979. For a history of currency in the British West Indies
British West Indies
The British West Indies was a term used to describe the islands in and around the Caribbean that were part of the British Empire The term was sometimes used to include British Honduras and British Guiana, even though these territories are not geographically part of the Caribbean...
in general, see British West Indies dollar.
Coins
COinS
ContextObjects in Spans, commonly abbreviated COinS, is a method to embed bibliographic metadata in the HTML code of web pages. This allows bibliographic software to publish machine-readable bibliographic items and client reference management software to retrieve bibliographic metadata. The...
were introduced in denominations of 1, 5, 10, 25 and 50 cents. The 1 cent was bronze, with the other coins struck in cupro-nickel
Nickel
Nickel is a chemical element with the chemical symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel belongs to the transition metals and is hard and ductile...
. In 1983, nickel-brass 1 and 5 dollars coins were issued, although the 5 dollars coin was not issued again. The original Bermuda dollar coin was modeled on the pound coin. These coins were unpopular, due to their size and weight and, with the one-dollar note not being removed from circulation, many Bermudians refused to use them. The original one-dollar coin was replaced in 1988 by a new coin, similar to the Canadian dollar coin. This was larger, but thinner. Having learnt from its experience with the first coin, the Bermudian government first fixed a date when the one dollar note would cease to be legal tender, obliging adoption of the new coin, the original one- and five-dollar coins ceasing to be legal tender. Also in 1988, copper-plated steel replaced bronze, and production of the 50-cent coins ceased. In 1991, copper-plated zinc replaced copper-plated steel in the 1 cent.
Commemorative coins of Bermuda
Bermuda has issued commemorative coins at various times. Most of these coins have been for the purpose of collecting, although Bermuda has also issued commemorative coins for regular circulation. All coins here were minted by the Royal Mint unless otherwise noted....
to celebrate certain events, historical milestones, flora and fauna. These coins bear a face value, but are generally seen more as collector's items
Collectible
A collectable or collectible is any object regarded as being of value or interest to a collector . There are numerous types of collectables and terms to denote those types. An antique is a collectable that is old...
or stores of value
Store of value
A recognized form of exchange can be a form of money or currency, a commodity like gold, or financial capital. To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved....
. Notable among these are the so called "Bermuda triangles" which are pressed on special lobed triangular planchets, are minted in gold and silver, and come in denominations divisible by three.
| Bermudian coins in circulation | ||||
|---|---|---|---|---|
| Denomination | Composition | Obverse | Reverse | Edge |
| 1 cent Penny A penny is a coin or a type of currency used in several English-speaking countries. It is often the smallest denomination within a currency system.-Etymology:... |
1970-1990: Bronze 1991-Present: Cu-Zi |
Queen Elizabeth II | Wild Hog | Plain |
| 5 cents | Cupronickel Cupronickel Cupronickel or copper-nickel or "cupernickel" is an alloy of copper that contains nickel and strengthening elements, such as iron and manganese. Cupronickel is highly resistant to corrosion in seawater, because its electrode potential is adjusted to be neutral with regard to seawater... |
Queen Elizabeth II | Angel Fish | Plain |
| 10 cents | Cupronickel | Queen Elizabeth II | Bermuda Easter lilies | Milled |
| 25 cents | Cupronickel | Queen Elizabeth II | Bermuda Longtail in flight | Milled |
| 1 dollar | Queen Elizabeth II | Bermuda Fitted Dinghy | Alternating Milled-Smooth |
Banknotes
Prior to changing to the dollar, the Government of Bermuda had not issued its own coins, other than commemorative ones (the Bermuda Crowns), since the 19th Century, at the latest. In the 20th century, its pound notes were issued in all denominations (and the only coins used were UK ones). In 1970, the government introduced dollar notes in denominations of 1, 5, 10, 20 and 50 dollars. From 1974, the Bermuda Monetary Authority took over paper money production, introducing 100 dollar notes in 1982 and 2 dollars in 1988, when the 1 dollar was replaced by a coin. 1970 dollar notes are all printed with Bermuda Government across the top. Later notes substitute Bermuda Monetary Authority. In 2008, it was announced that banknotes would be redesigned in celebration of Bermuda's 400th anniversary, the first redesign since the launch of the dollar.http://www.royalgazette.com/siftology.royalgazette/Article/article.jsp?articleId=7d81b373003001b§ionId=60 The new designs were described as "distinctly Bermudian",http://www.bma.bm/uploaded/081124%20BMA%20Press%20Release%20-%20New%20Banknote%20Series.pdf with Queen Elizabeth II being relegated to a minor position,http://www.royalgazette.com/siftology.royalgazette/Article/article.jsp?articleId=7d8bc4a30030001§ionId=60 using a royal effigyMachin series
The Machin series of postage stamps is the main definitive stamp series in the United Kingdom, used since 5 June 1967. It is the second series to figure the image of Elizabeth II, replacing the Wilding series....
by Arnold Machin
Arnold Machin
Arnold Machin O.B.E, R.A. was a British artist, sculptor, coin and stamp designer.Machin was born in Stoke-on-Trent in 1911. He started work at the age of 14 as an apprentice china painter at the Minton Pottery. During the Depression he learnt to sculpt at Stoke-on-Trent's Art School, which was...
.
The designs are said to feature themes and scenes of maritime Bermuda, and like their predecessors are coloured by value:http://www.bma.bm/uploaded/Posters.pdf
- $2: Blue; An Eastern BluebirdEastern BluebirdThe Eastern Bluebird, Sialia sialis, is a small thrush found in open woodlands, farmlands and orchards, and most recently can be spotted in suburban areas. It is the state bird of Missouri and New York....
backed by a scene from the Royal Naval DockyardRoyal Naval Dockyard, BermudaHMD Bermuda was the principal base of the Royal Navy in the Western Atlantic between American independence and the Cold War. Bermuda had occupied a useful position astride the homeward leg taken by many European vessels from the New World since before its settlement by England in 1609... - $5: Pink; An Atlantic blue marlinAtlantic blue marlinThe Atlantic blue marlin is a species of marlin endemic to the Atlantic Ocean. The Atlantic blue marlin feeds on a wide variety of organisms near the surface. By using its bill, it can stun, injure, or kill while knifing through a school of prey and then return later at its leisure to eat...
backed by the Somerset BridgeSomerset Bridge, BermudaSomerset Bridge is a small bridge in Bermuda. Connecting Somerset Island with the mainland in the western parish of Sandys, Somerset Bridge is reputedly the smallest working drawbridge in the world.... - $10: Purple; A Bermuda blue angelfishBermuda blue angelfishThe Bermuda blue angelfish, Holacanthus bermudensis, is a species of marine angelfish of the family Pomacanthidae. Holocanthus bermudensis should not be confused with Holocanthus ciliaris, or queen angelfish, despite very similar appearances...
backed by the Deliverance and a scene from the Royal Naval DockyardRoyal Naval Dockyard, BermudaHMD Bermuda was the principal base of the Royal Navy in the Western Atlantic between American independence and the Cold War. Bermuda had occupied a useful position astride the homeward leg taken by many European vessels from the New World since before its settlement by England in 1609...
. - $20: Green; A green "whistling frog", distinct from the local brown Eleutherodactylus johnstonei and Eleutherodactylus gosseiEleutherodactylus gosseiEleutherodactylus gossei is a species of frog in the Leptodactylidae family.It is endemic to Jamaica and Bermuda.Its natural habitats are subtropical or tropical moist lowland forests, subtropical or tropical moist montanes, rural gardens, and heavily degraded former forest.It is threatened by...
, backed by Gibbs Hill LighthouseGibbs Hill LighthouseThe Gibbs Hill Lighthouse is the taller of two lighthouses on Bermuda, and the first of only a few lighthouses in the world to be made of cast-iron. This is because at that time, steel still was not able to be bent. The optic consists of a Fresnel lens from 1904 revolving on steel bearings. ...
and a church. - $50: Yellow; A Red-billed TropicbirdRed-billed TropicbirdThe Red-billed Tropicbird, Phaethon aethereus, also known as the Boatswain Bird is a tropicbird, one of three closely related seabirds of tropical oceans.-Distribution and habitat:...
backed by a church; this bird is not native to, nor in any way common on, Bermuda.http://www.royalgazette.com/siftology.royalgazette/Article/article.jsp?articleId=7d8be4330030005§ionId=60http://www.google.com/hostednews/ap/article/ALeqM5jVGbxkfslWnZAVTZ7R6XIb-2tGOQD94O1K001 - $100: Red; A red cardinal birdCardinal (bird)The Cardinals or Cardinalidae are a family of passerine birds found in North and South America. The South American cardinals in the genus Paroaria are placed in another family, the Thraupidae ....
backed by the House of Assembly of BermudaHouse of Assembly of BermudaThe House of Assembly is the lower house of the Parliament of Bermuda. The house has 36 members, each elected for a five year term in a single seat constituencies....
The first $1 million batch of new notes has been slated for release in early 2009.http://www.royalgazette.com/siftology.royalgazette/Article/article.jsp?articleId=7d8bcb730030000§ionId=60
External links
- Bermuda Monetary Authority
- Essential facts about the Bermuda dollar (geared toward overseas visitors)