The Federal Law on Currency and Payment Instruments stipulates the Swiss currency to be the franc. Legal tender – i.e. payment instruments by which monetary debts may be settled with legal effect – are, according to that law, banknotes, coins, and sight deposits at the Swiss National Bank. For historical reasons, they are issued by two different institutions: The Swiss National Bank issues banknotes, while Swissmint – an autonomous unit of the Federal Finance Administration managed by performance mandate and global budget – strikes coins. It then delivers the coins to the National Bank, which circulates them according to the needs of the economy. The National Bank also determines the face value and design of the banknotes. It chooses the denominations so that the economy is optimally supplied with printed money. When designing banknotes, security from counterfeiting plays a particularly important role.
While banknotes and sight deposits at the National Bank are of unlimited legal validity, i.e. as many of which as desired may be used to settle debts and must be accepted as payment, the legal validity of coins for circulation is limited to 100 coins. Anniversary and commemorative coins are not considered legal tender and may therefore be refused. Privately issued payment instruments – such as cheques, guarantee and payment cards, bank and postal accounts, and electronic money – are likewise not considered legal tender. They are therefore not governed by the Federal Law on Currency and Payment Instruments. Their issue is governed by market forces.