1 Sovereign – Gibraltar

In 2018, Gibraltar's currency situation remained defined by its unique political and economic status as a British Overseas Territory. The legal tender was, and remains, the Gibraltar pound (GIP), which is issued by the Government of Gibraltar and is pegged at par with the British pound sterling (GBP). This parity is a cornerstone of financial stability, allowing sterling to circulate freely alongside the local currency. However, a persistent practical challenge was the frequent refusal of Gibraltar pound banknotes by retailers in the United Kingdom, as they were not legal tender there, causing inconvenience for residents and visitors crossing the border.

The year unfolded without major changes to this long-standing system, but against a significant backdrop: the ongoing negotiations for the United Kingdom's withdrawal from the European Union. As the UK prepared for Brexit, Gibraltar's financial sector, which contributes significantly to its economy, faced profound uncertainty. Key concerns included future access to the EU single market and the potential impact on the territory's ability to offer financial services across borders. The currency peg itself was not in question, but the economic conditions underpinning it were under scrutiny.

Furthermore, 2018 saw Gibraltar continue to develop its position as a fintech hub, with the government promoting blockchain and distributed ledger technology. This modernisation drive existed alongside the traditional currency framework. Ultimately, while the mechanics of the Gibraltar pound were stable, the entire monetary environment was shadowed by the geopolitical gamble of Brexit, with stakeholders anxiously awaiting clarity on future trade and financial services agreements that would define the territory's economic landscape for years to come.