25 Centimes – Grand Duchy of Luxembourg

In 1919, the Grand Duchy of Luxembourg faced a complex and precarious currency situation, a direct legacy of the First World War. During the German occupation (1914-1918), the German Reichsmark had been imposed as legal tender, supplanting the pre-war Luxembourg franc, which had been pegged to and circulated alongside the Belgian franc. Following the Armistice, Luxembourg was flooded with now-worthless German paper marks, creating a monetary crisis and severe inflation. The urgent task for the government was to swiftly establish a stable and sovereign currency system to facilitate economic recovery and assert national independence.

The solution was enacted with the Law of 26 August 1919, which created the Luxembourg franc as the sole legal tender, severing the forced link to the German currency. However, recognizing deep economic ties, Luxembourg chose to peg its new franc at par with the Belgian franc and entered into a monetary union with Belgium, formalized in the Belgium-Luxembourg Economic Union (BLEU) treaty of 1921. This pragmatic alliance allowed Belgian banknotes and coins to circulate freely in Luxembourg, while distinctive Luxembourg franc coins were also minted. The Luxembourgish state did not initially issue its own banknotes, relying instead on Belgian notes.

Thus, by the end of 1919, Luxembourg had successfully navigated its post-war monetary chaos by demonetizing the German mark and launching a national currency. The foundation was laid for a system of shared, but not fully surrendered, monetary sovereignty with Belgium. This arrangement provided immediate stability and defined Luxembourg's currency framework for decades, balancing the need for economic integration with a key neighbour against the symbolic and practical requirements of national identity.