Comprehensive Financial History Report of British Honduras (now Belize)

Basic Information

• Country ISO Code: BZ

• Official Language: English

• Language ISO Code: en

• Current Official Currency: Belize Dollar

• Currency ISO Code: BZD

Monetary History of British Honduras

Early Currency and Legal Tender

• The earliest currency legislation dates back to June 19, 1784, when Jamaican currency was declared legal tender in British Honduras.

• Various currencies circulated, including Spanish silver dollars, British sterling coins, and US dollars.

• The Guatemalan silver peso was the dominant currency until the late 19th century.

Transition to US Dollar-Based Currency

• In 1885, British Honduras began issuing copper 1 cent coins, followed by higher denominations in 1894.

• In 1894, the government issued its first banknotes and shifted the currency base from the Guatemalan silver peso to the US dollar gold standard.

• The exchange rate was set at $4.866 = 1 British pound sterling, reflecting the slight discount of the US dollar relative to the Spanish dollar.

• The 25 cent coin was colloquially called a "shilling" because of its value similarity to the British shilling.

Currency Board and Banknotes

• The Board of Commissioners of Currency managed currency issuance from 1894 to 1976.

• Four main banknote issues under British Honduras:

  • First Issue (1894): $1, $2, $5, $10, $50, $100 (rare).

  • Second Issue (1895-1928): Same denominations, design changes (rare).

  • Third Issue (1939-1951): $1, $2, $5, $10, featuring Belize’s Coat of Arms and King George VI’s portrait.

  • Fourth Issue (1952-1973): $1, $2, $5, $10, $20, with Queen Elizabeth II’s portrait and Belize’s Coat of Arms.

Exchange Rate and Devaluations

• The British Honduras dollar was pegged to the US dollar from its introduction, not part of the sterling bloc after the UK left the gold standard in 1931.

• In 1949, after the British pound devaluation, the British Honduras dollar was devalued to 70 US cents (5 shillings sterling).

• Following the 1967 devaluation of sterling by Harold Wilson, the British Honduras dollar was further devalued to 60 US cents.

• In 1978, the link to the British pound was abandoned, and the currency was pegged exclusively to the US dollar at 2 BZ$ = 1 USD, a rate still in use today.

Transition to Belize Dollar

• British Honduras was renamed Belize on January 1, 1973.

• The Belize dollar replaced the British Honduras dollar at par on January 1, 1974.

• The Monetary Authority of Belize took over banknote printing in 1976, and the Central Bank of Belize was established in 1981.

• Banknotes issued by the Government of British Honduras were demonetized on January 1, 1981, and are only redeemable at the Central Bank of Belize.

• Coins issued under British Honduras remain legal tender in Belize.

Coins

• Initial coins: 1 cent (1885), followed by 5, 10, 25, 50 cents, and 1 dollar coins.

• Coins featured local symbols and were made initially of bronze and silver, later shifting to cupronickel and aluminum.

• The 25 cent coin was known as the "shilling" due to its value.

Banknotes

• Denominations issued included $1, $2, $5, $10, $20, $50, and $100.

• Designs featured the Belize Coat of Arms and portraits of British monarchs (King George VI, Queen Elizabeth II).

• Banknotes evolved over time with changes in design and security features.

Issuing Authorities

Summary Table

Additional Information

• Coins issued under British Honduras remain legal tender.

• Banknotes from the British Honduras era are no longer legal tender but can be redeemed at the Central Bank of Belize.

• The currency history reflects British Honduras’ transition from a British colony to the independent nation of Belize, with a monetary system closely linked to the US dollar.

This report provides a comprehensive overview of the financial history of British Honduras, detailing the currency evolution, coinage, banknotes, and the transition to the Belize dollar as the current official currency.

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