Gibraltar Pound (GIP): What It Is and Gibraltar’s Economy

Overview

The Gibraltar pound (GIP) is the official currency of Gibraltar, a British Overseas Territory located at the southern tip of the Iberian Peninsula. The GIP is pegged to the British pound sterling (GBP) at a 1:1 fixed rate and circulates alongside UK-issued banknotes and coins within Gibraltar.

Key facts

• ISO code: GIP
• Peg: Fixed at par with the British pound sterling (1 GIP = 1 GBP)
• Legal tender: Gibraltar notes and coins are legal tender only in Gibraltar; UK currency is legal tender in Gibraltar but Gibraltar currency is not legal tender in the United Kingdom
• Commonly accepted: Many retailers in Gibraltar also accept the euro informally
• Decimalization: Gibraltar decimalized in 1971 (1 pound = 100 pence)

Denominations

Gibraltar issues its own banknotes and coins with British-style denominations but distinct designs.

Banknotes
* £5, £10, £20, £50, £100

Coins
* 1p, 2p, 5p, 10p, 20p, 50p, £1, £2

Currency use and exchange

• Gibraltar issues and controls its currency under local legislation.
• GIP can be exchanged for GBP at par.
• British coins and banknotes are widely used and accepted in Gibraltar.
• Gibraltar currency generally cannot be used in the United Kingdom and is typically accepted only within the territory.

History and development

• Before the GIP: Gibraltar’s monetary history included the Spanish real and later widespread use of British coinage.
• 1927: Gibraltar began issuing its own banknotes—marking the origin of the Gibraltar pound as a distinct currency.
• 1971: Decimalization aligned Gibraltar with the UK’s move from the old pounds/shillings/pence system to 100 pence to the pound.
• 1988: Gibraltar began issuing its own coins with unique designs and the country’s name.
• 1999: Introduction of a £2 coin; since then, annual £2 designs have commemorated themes such as the 12 Labors of Hercules.
• 2011: The Gibraltar government assumed full responsibility for the design and production of its banknotes.
• 2016: A new £100 polymer banknote featuring Sir Joshua Hassan included advanced security elements (a holographic foil on Safeguard polymer).

Gibraltar’s economy and the currency’s role

Historically, the British military presence and the naval dockyard dominated Gibraltar’s economy. Over recent decades military-related activity has declined significantly. Today Gibraltar’s economy is diversified with strong sectors including:
* Financial services
Online gaming and digital industries
Maritime services, including bunkering and navigation
* Tourism

The stability provided by the GIP’s peg to the pound sterling supports trade and financial activity, while Gibraltar’s use of sterling currency and alignment with UK monetary practice facilitates transactions with the UK and international partners.

Notable commemoratives and issues

• Commemorative coin issues have marked events such as the tercentenary of British Gibraltar (1704–2004).
• New series of banknotes were issued at various times (notably in 1995 and 2010–11), and a £100 polymer note was introduced in 2016 with modern security features.

Summary

The Gibraltar pound functions as Gibraltar’s domestically issued currency while remaining tightly linked to the British pound through a fixed 1:1 peg. It circulates alongside UK currency within the territory and supports a small, diversified economy that has shifted from military dependence toward finance, online gaming, maritime services, and tourism.