Historical Sketch

The Spanish navigator Juan de Bermúdez was the first European to arrive at the uninhabited islands in 1503. In 1609, they were re-discovered of by George Somers of the Virginia Company, and received the name of Somers Isles, which remained in use until the 19th century. The Somers Isles Company obtained an English royal charter for the exploitation in 1615 an administered the islands until its dissolution in 1684. Afterwards, the rule passed to the English crown. In 1968, Bermuda attained internal autonomy, a move towards full independence was rejected in a 1995 referendum.

Monetary History Overview

The Caribbean had always been an important station on the trade routes between the Spanish American possessions and Europe. Thus, Spanish trade coins got introduced and dominated the payment transactions, predominantly the so-called "Spanish Dollar", the eight Reals in silver. The isolation of the islands brought scarcity of specie and thus caused an overvaluation of the trade coins compared with the European markets. In the English possessions, various "accounting Shillings" emerged which were determined by the local valuation of the Spanish trade coins In Bermuda the situation differed from other islands as in 1787 an effective gold currency had been introduced that tied accounting to the gross weight of the circulating foreign coins, predominantly Spanish with the Doubloon traded at about 104½ shillings, differing considerably from the metropolitan rating of 64 shillings Sterling. Silver such as the Spanish Dollar was treated as subsidiary currency. In 1825, the Pound Sterling became the sole currency for all British possessions. The dominance of Spanish trade coins in payments did not change for the time being. In the mid-19th century, however, the local accounting currencies were abolished everywhere, which corresponded to a massive devaluation of the local money. In Bermuda this was done in 1842 and amounted to about 39%. The foreign coinage was tolerated in payments until the late 19th century.

In 1915, the colonial government created the Bermuda Currency Commission and began issuing paper money, circulating alongside the British banknotes which had been authorized at the same time. The Bermudian Pound was on par with the Pound Sterling. When Great Britain unified the currencies of its Caribbean possessions in 1951 Bermuda stayed apart and kept its own currency. Due to its close economic relations with the United States, Bermuda decided in the late 1960s to switch to the US Dollar area. In February 1969, the Currency Commission was replaced by the Bermuda Monetary Authority with a wider mandate. A year later, the currency was decimalized with the Bermudian Dollar became the new national currency. The transition was made in such a way that the Bermudian Dollar was equal to the US Dollar, which has remained unchanged since then.

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