The Swiss franc is not backed by gold. Switzerland cut the formal link between its currency and bullion in 2000, and the franc has floated as a fiat currency ever since, just like the U.S. dollar or the euro. If you hold a 100-franc note, no bank is obligated to hand you a fixed weight of metal in exchange. The Swiss National Bank still keeps a large gold reserve, but that gold sits on the central bank’s balance sheet as one asset among many, not as a guarantee behind every franc in circulation.
When Switzerland Ended the Gold Link
For most of the twentieth century, Swiss law required at least 40% of the francs in circulation to be covered by physical gold.1Swiss National Bank. Monetary Policy Background to the Gold Transactions of the Swiss National Bank in the Second World War Switzerland kept that rule in place long after other major economies had abandoned their own gold standards, and it was the last significant holdout.
That changed in April 1999, when Swiss voters narrowly approved a new federal constitution. The revision removed the gold-backing requirement, and the new rules took effect on January 1, 2000. Dropping the 40% floor gave the central bank flexibility that the old regime had denied it. Under the previous system, the money supply was physically constrained by how much gold sat in the vaults. Without that constraint, Switzerland finally aligned with the floating exchange rate system the rest of the developed world had been using for decades.
What the Swiss Constitution Says About Gold Now
Gold still has a place in Swiss law, but not the one it used to have. Article 99 of the Federal Constitution directs the Swiss National Bank to “create sufficient monetary reserves from its profits” and specifies that “a part of these reserves shall be held in gold.”2Swiss Federal Constitution. Swiss Federal Constitution Art. 99 Monetary Policy No minimum percentage is set. No tonnage is set. The constitution simply requires gold to remain part of the reserve mix.
The distinction matters. This is a rule that tells the central bank to keep some gold on hand as part of a diversified balance sheet. It is not a rule that ties every franc to a gram of metal, and it creates no right for anyone holding a franc to redeem it for bullion. How much gold to hold, and how to balance it against other assets, is left to the SNB’s discretion.
How Much Gold Switzerland Actually Holds
The Swiss National Bank holds 1,040 tonnes of gold, a figure that has been unchanged for over a decade.3Swiss National Bank. Annual Result of the Swiss National Bank for 2025 That makes Switzerland the seventh-largest national gold holder in the world. On a per capita basis, with roughly 9 million residents, it holds more gold per citizen than any other country, at about 115 grams per person.
The stockpile is not kept in a single location. According to SNB disclosures, roughly 70% is stored in Switzerland, 20% at the Bank of England in London, and 10% at the Bank of Canada. Splitting reserves across jurisdictions is standard practice among central banks, guarding against the risk that any one vault becomes inaccessible during a crisis.
Before the 2000 reform, the SNB held about 2,590 tonnes. Between 2000 and 2008, it sold roughly 1,550 tonnes, bringing reserves down to the current level. Once the constitutional obligation to cover circulating francs with gold disappeared, the bank had no reason to hold on to that much metal.
The 2014 Vote to Bring Back Gold Backing
The sales left some Swiss voters uneasy, and in November 2014 a popular initiative called “Save Our Swiss Gold” went to the ballot. It would have written three new rules into the constitution: hold at least 20% of total SNB assets in gold, repatriate all gold reserves to Swiss soil, and permanently ban future gold sales.4Swiss National Bank. Arguments of the SNB Against the Initiative Meeting the 20% threshold alone would have forced the SNB to buy roughly 1,500 additional tonnes within five years.
The central bank campaigned hard against it, arguing that reserves exist to be deployed in a crisis, and that a permanent no-sale rule would defeat the whole point of holding them. Voters agreed. About 78% voted no, confirming public willingness to leave reserve management to the SNB rather than lock the country back into rigid gold rules.
What Supports the Franc’s Value Today
If gold no longer stands behind the franc, what does? The franc’s value comes from institutional credibility built over generations and rests on several concrete pillars:
- Central bank independence. The SNB operates with constitutional autonomy from the federal government and sets monetary policy in the country’s general interest rather than to serve a political agenda.2Swiss Federal Constitution. Swiss Federal Constitution Art. 99 Monetary Policy
- Large foreign currency reserves. The SNB held roughly CHF 725 billion in foreign currency reserves as of January 2026, giving it substantial firepower to intervene in currency markets when the franc moves too far in either direction.5SNB Data Portal. Switzerland’s Reserve Assets – Section 1
- Low and stable inflation. The SNB defines price stability as consumer price increases below 2% per year and has consistently delivered inflation near or below that level.6Swiss National Bank. The SNB’s Monetary Policy Strategy
- Persistent trade surpluses. Switzerland exports more than it imports year after year, generating steady foreign demand for francs.
- Political neutrality and rule of law. A long tradition of neutrality and a predictable legal system make the franc attractive as a safe-haven asset during global instability.
The foreign currency holdings alone are worth more than six times the gold reserves, and they can be moved into any market in the world within hours. Gold in a vault cannot be deployed that way. What makes the franc one of the world’s stronger currencies is the whole institutional package, not a single asset on the balance sheet.