The Grand Duchy of Luxembourg is a small, landlocked country in Western Europe. It is bordered by France to the south, Germany to the east, and Belgium to the south. Luxembourg is in between France and Germany so it uses three languages: German, French, and Luxembourgish.
Luxembourg is one of the few remaining sovereign grand duchies. The Grand Duke remains the head of state. Though Luxembourg is one of the smallest countries in the world, it is also one of the most powerful countries in Europe. It is one of the founding members of the European Union. Luxembourg City, the capital of Luxembourg, is also one of the four official capitals of EU. The city is also the home of the EU’s Justice Court. Luxembourg also has one of the strongest economies in the world. As of 2018, Luxembourg has the highest per capita GDP in the world. Its economy is largely dependent on their banking, steel, and industrial sectors.
Luxembourg uses the euro as its currency. However, before the euro, Luxembourg used the Luxembourg franc and the Luxembourg mark from 1854 to 1999. The Luxembourg franc and Luxembourg mark are interchangeable, with both currencies featured on Luxembourg’s banknotes.
The Banque International a Luxembourg (International Bank of Luxembourg) is a private bank that produced banknotes since 1856. It produced gulden, thaler, mark, and franc notes. The bi-currency notes (franc and mark) had an exchange rate of 1 franc = 80 pfennig. When Luxembourg started producing its own franc/mark notes in 1856, it was introduced at par with the Belgian franc. These early franc/mark notes had hand-stamped denominations and featured ordinary workers. At the start of World War I, Germany invaded Luxembourg. Even though Germans occupied Luxembourg, Luxembourg still retained its government and monetary system. Because most of the metals were used in ammunition in the war, the International Bank issued small value notes to address the coin shortage. After the war, the bank issued notes that featured Grand Duchess Charlotte and agricultural scenes. Four years after the abdication of Grand Duchess Charlotte, the bank issued notes that featured Grand Duke Jean in front and the industrial sector at the back. The last franc/mark banknote that the International Bank issued featured both Grand Duke Jean and Prince Henry of the Netherlands in front and an allegory of family at the back.
The Luxembourg State Treasury issued notes that ran concurrently to the banknotes of the International Bank. The first series of treasury notes to feature Grand Duchess Charlotte was issued in 1918, following her ascension to the throne. After the Second World War broke out, Germany invaded Luxembourg again. Unlike the First War occupation, the Luxembourgish government and Grand Duchess Charlotte fled the country and Germany replaced the government with its own civil administration. Luxembourg officially became part of Germany in August 1942. Luxembourg was liberated from Germany in 1943 and the Luxembourg franc was reestablished. The franc was tied to the Belgian franc at par and both currencies were legal tender in both territories. These franc notes featured a new portrait of Grand Duchess Charlotte in front and various landmarks and everyday life at the back. Grand Duchess Charlotte abdicated the throne in 1964 and Grand Duke Jean ascended the throne. To reflect this change, the State Treasury issued new banknotes that featured the portrait of Grand Duke Jean in his military uniform.
The Institut Monetaire Luxembourgeois (Luxembourg Monetary Institute) took over paper money issuance from the government in 1985. The last series of Luxembourg franc/mark banknotes featured an updated portrait of Grand Duke Jean and the Grand Ducal Palace in front and different landmarks at the back.