What Is GIP?
GIP is the abbreviation for the Gibraltar pound, the official currency for the country of Gibraltar. The Gibraltar pound is pegged at par value with the British pound sterling. The government of Gibraltar issues the GIP, and mints coins in £1, £2, £5, 1 pence, 2 pence, 5 pence, 10 pence, 20 pence and 50 pence, and it prints banknotes in £5, £10, £20, £50, and £100.
Gibraltar is represented in the European Union as a British overseas territory. The GIP is not recognized in the United Kingdom although it can be exchanged for British pound sterling notes. The Gibraltar pound is tied to the Sterling pound with a fixed exchange rate.
Gibraltar is a British territory located in the south of the Iberian Peninsula. The Gibraltar pound is issued by the Government of Gibraltar under the terms of the 1934 Act Currency Notes. The notes are legal tender in Gibraltar as are British coins and notes issued by the Bank of England. The coins in circulation use British names but have different designs. Most retail stores in Gibraltar unofficially also accept the euro although the Royal Gibraltar Post Office does not accept the euro.
The British military has dominated the economy of Gibraltar, and its naval dockyard was historically the center of economic activity. However, military activities are less prominent and have declined over the last twenty years. According to Oanda, a trading platform, military activities now account for an estimated 7% of the local economy. In 1984, military activities represented over 60 percent of the economy. Gibraltar's economy is now based on financial services, online gaming, navigation and tourism.
The History of the Gibraltar Pound
Until 1825, the Spanish real, or the Spanish “real de plata,” was the official currency of Gibraltar. From 1825 to 1872, the real continued to circulate alongside the British and Spanish currencies. The real was tied to the pound at the rate of 1 Spanish dollar to 4 shillings 4 pence (equivalent to 21.67 pence today, according to Oanda. In 1872, the real became the only legal tender. However, in 1898, the value of the Spanish peseta plummeted because of the Spanish-American War, and the Gibraltar Pound became the legal tender initially in the form of British coins and banknotes. Gibraltar pound coins with different designs were introduced in 1988, 2-pound coins were introduced in 1999 and a new 5-pound coin was issued in 2010 inscribed with "Elizabeth II • Queen of Gibraltar."