French Franc (F): What it was, History, Example

What Is the French Franc (F)?

The French franc (F) was the national currency of France prior to France’s adoption of the euro (EUR) in January 2002. Prior to its replacement by the EUR, the franc was administered by the Bank of France and was comprised of 100 subunits, or ‘centimes.’

The franc was available in coin denominations of 1, 5, 10, and 20 centimes; and in 0.5, 1, 2, 5, 10, and 20 francs. Its banknotes were available in denominations of 20, 50, 100, 200, and 500 francs.

History of the French Franc (F)

The history of the French franc begins in 1360, following the capture of King John II by England during the Battle of Poitiers—a seminal battle of the Hundred Years' War. In order to afford his ransom, France was forced to mint new gold coins. One franc coin contained the image of King John II free from captivity on horseback, while another coin showed him free on foot. The French phrases for these two images, “franc à cheval” and “franc à pied," caught on. Soon, users of the coins referred to them simply as "francs."

The French Revolution was a time of major political and economic upheaval, in which changes to the national currency were introduced on numerous occasions. One such change was the creation of a new gold franc in 1803, containing 290.32 mg of gold. This was the first gold coin to be denominated in francs, and it depicted Napoleon Bonaparte as Emperor of France. This new coin, and the several iterations which followed them, were popularly known as “Gold Napoleons” and were widely praised for their status as sound money.

As the French economy industrialized throughout the 19th century, the franc grew to become a significant international currency. In 1865, France was a founding member of the Latin Monetary Union, an early attempt to unite European economies under one currency. The union was first based on a bimetallic standard but later switched to a standard based solely on gold. Following World War II, France continued its advocacy for further integration of European currencies.

Before the euro was introduced, francs were either part of the monetary system or accepted as legal tender in several European countries other than France. These included Belgium, Luxembourg, Andorra, Monaco. It was also used in some countries that were colonized by France, such as Algeria and Cambodia.

In 1992, the French public approved the passage of the Maastricht Treaty, which serves as the basis for the European Union and the implementation of the euro. This approval put the country on the path to establishing the euro. On Jan. 1, 2002, France finalized its adoption of the euro, following a three-year transitional period during which both the franc and the euro were treated as legal tender.

Value of the French Franc vs. the Euro

The franc saw its value decline precipitously in the roughly 100-year period prior to the adoption of the euro. This was due in large part to the two World Wars, which required France to bear significant wartime spending. This inflationary pressure, combined with the severe destruction of property caused by the fighting, contributed to a persistent downward slide in the value of the franc during the first half of the 20th century. Although its value stabilized briefly during the 1930s, the outbreak of World War II led to further erosion of purchasing power.

In contrast to this turbulent history, the euro has been relatively stable since its adoption by France in 2002. Between 2002 and 2022, the euro has seen its value range from 0.68 euros per U.S. dollar (USD) to $1.058 euros per USD. France’s gross domestic product (GDP) grew by an average of about 1.09% per year from 2002 to 2021, though the variation in GDP ranged from -7.8% to 6.8%. During the same time period, inflation held steady at an average of 1.41% per year, ranging only from 0% to 2.8%.

The Bottom Line

The French franc (F) was the national currency of France until the country adopted the euro as its currency in 2002. Before that, the franc had a long history that spanned more than 600 years, since its first use in 1360.

France was a long-time supporter of monetary integration in the European Union, even before it adopted the euro. The euro has been a relatively stable currency since France began using it, with both inflation and GDP rising steadily over time.