The Scandinavian Monetary Union
Formed in the late 19th century, the Scandinavian Monetary Union unified Denmark, Sweden, and Norway under a gold-based krona system, creating one of Europe’s most successful early monetary alliances.
Inspired by the Latin Monetary Union (LMU), the Scandinavian Monetary Union (SMU) was a supranational monetary alliance formed by the Nordic countries of Denmark, Sweden, and Norway in the late nineteenth century. More about the LMU can be read in the November 2025 issue of World Coin News.
Denmark and Sweden initially considered joining the LMU treaty, which had just been signed. However, France’s defeat in the Franco-German War in 1871 made the countries change their minds and seek a different option. This led to the establishment of a Scandinavian Momentary Commission, which first met in Copenhagen on August 19, 1872.
An agreement to form a monetary union was signed in Stockholm on December 18, 1872, by Denmark and Sweden, while the Norwegian parliament initially rejected the proposal. As a result, the SMU was born on May 23, 1873, as a bilateral monetary union. Norway joined the Union on October 16, 1875, after having adopted the gold standard earlier that year.
Unlike the LMU, which was based on a bimetallic silver-gold standard, the SMU was exclusively based on a gold standard. The shift to adopting the gold standard by the Scandinavian nations was motivated by the introduction of the gold mark in Germany and the volatility of the silver market.
The SMU established a common currency unit, the krona (crown in English), for use in all members of the Union and set fixed exchange rates. The member states continued to issue their own separate coins according to an agreed standard, which made them readily acceptable in the other territories of the Union on a one-to-one exchange ratio.
Sweden and Denmark introduced the krona in 1873, with Norway doing the same on its accession in 1875. The countries subsequently struck gold coins with identical specifications, making them interchangeable. In this sense, 10-krone and 20-krone gold coins were struck by the three countries in 0.900 pure gold (10 krone: weight of 4.4803 grams and diameter of 18 millimeters; 20-krone: 8.9606 grams, 23 millimeters). Sweden additionally struck 5-krone gold coins that proportionally adhered to the agreed-upon standard (2,2402 grams, 16 millimeters).
While it was not part of the treaty, the countries also attempted to harmonize their silver currency by striking 1-krone coins with the same specifications (weight: 7.5 grams, diameter: 25 millimeters, 0.800 silver). In this way, commercial exchanges with the European nations that had joined the bimetallism-based LMU treaty were simplified as fixed conversion rates for both metals were introduced. The value of one French franc was therefore fixed at 0.72 krone.
Despite the implementation of a gold standard and the striking of corresponding coins, the respective central banks of the Union states soon replaced the gold in circulation with krone bank notes, guaranteeing their nominal value by the corresponding value in coined gold.
By 1901, bank notes had become the predominant currency in circulation. Although not initially foreseen by the SMU, the notes of each country were also accepted as legal tender in the others on a one-to-one exchange ratio. That constituted another fundamental difference with the LMU, which was always limited to coins.
While the SMU did not contemplate the creation of a common central authority or bank to regulate the coinage policies of its member states, their banking authorities did cooperate intensively to this end.
The political union between Sweden and Norway was dissolved in 1905, without affecting the conditions set in the SMU or the acceptance of the respective currencies in the three countries. The Scandinavian countries suspended the gold convertibility of their currencies in 1914 at the outbreak of World War I. The inability to maintain fixed exchange rates among these coins severely undermined the SMU. In practice, the Union had already been abandoned by 1921, while it was only formally dissolved in 1927.
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