The Federal Act on Currency and Payment Instruments (CPIA) stipulates that Switzerland's currency is the Swiss franc. Under the Act, legal tender – i.e. payment instruments by which monetary debts may be settled with legal effect – comprises 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 – strikes coins. It then delivers the coins to the SNB, which circulates them according to the needs of the economy. The SNB 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 an important role.
While banknotes and sight deposits at the SNB are of unlimited legal validity, i.e. as many of them as desired may be used to settle debts and must be accepted as payment, the legal validity of circulation coins 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 CPIA.