1 Sovereign – Gibraltar

In 2022, Gibraltar's currency situation remained defined by its unique constitutional relationship with the United Kingdom and its geographical and economic integration with neighbouring Spain. As a British Overseas Territory, its official currency is the Gibraltar pound (GIP), which is issued by the Government of Gibraltar and is pegged at par value with the Pound Sterling (GBP). Sterling notes and coins also circulate freely and are accepted interchangeably with local notes, creating a de facto dual-currency system where the UK pound is the dominant physical cash.

The year saw a continued emphasis on the use of Sterling in daily transactions, particularly as Gibraltar's economy is heavily reliant on the UK in sectors like finance, online gaming, and tourism. However, the practical reality of cross-border flow with Spain meant that the Euro was also widely accepted, especially in retail and hospitality sectors catering to visitors. This euroization of parts of the economy provided flexibility but also introduced exchange rate exposure for businesses, with the GBP/EUR rate being a point of commercial attention throughout the year.

A key background issue in 2022 was the ongoing negotiation of a UK-EU treaty regarding Gibraltar's post-Brexit relations, which held significant implications for the currency environment. The potential for a loosening of the border with Spain, discussed within the treaty framework, pointed towards a future of even greater euro usage. Consequently, while the formal peg to Sterling remained the bedrock of monetary policy, the practical currency landscape was hybrid, shaped by political negotiations and the day-to-day necessities of a small, open economy situated at a geopolitical frontier.