25 YEARS OF THE CONVERTIBLE MARK: A CURRENCY THAT PROVIDES STABILITY AND CONFIDENCE

On this day, June 22, 1998, 25 years ago, the first banknotes of the convertible mark were put into circulation in the denominations of 50 F, 1 KM, 5 KM and 10 KM. With the release of the first banknotes into circulation, the history of the domestic currency, the convertible mark, as legal tender in Bosnia and Herzegovina began.

Digital version - souvenir banknote of 25 years of the CBBH

Not long after, banknotes of smaller denominations were joined by banknotes of larger denominations, on July 27, 1998, when banknotes in denominations of 20 KM, 50 KM and 100 KM were put into circulation. The 200 KM banknote was issued on May 15, 2002, and eventually completed the current denomination structure of convertible mark banknotes.

The first convertible mark coins were also issued in 1998, on December 9 in denominations of 10 F, 20 F and 50 F, then in larger denominations of 1 KM and 2 KM on July 31, 2000, and finally, on January 5, 2006, in the smallest and largest denominations of 5 F and 5 KM.

Of the convertible mark banknotes issued in 1998, banknotes in denominations of 50 F, 1 KM, 5 KM were subsequently withdrawn from circulation and ceased to be legal tender, and their place in use was taken by convertible mark coins. Currently, the denomination family of banknotes and coins of the convertible mark in circulation consists of five denominations of banknotes and seven denominations of coins.

Cash payment transactions in Bosnia and Herzegovina, before the introduction of the convertible mark, were burdened by numerous currencies. It was a difficult path to win the space for the KM currency to suppress confidence in others and become a trusted currency for citizens and the economy. A huge effort has been made to create a legal and regulatory framework for the introduction of the convertible mark. In accordance with the legal regulations in Bosnia and Herzegovina, domestic payments are made exclusively with convertible marks.

During 1998, an extensive promotional campaign was carried out on the introduction of the domestic currency - KM. Banknotes issued in 1998 were produced at the Francois-Charles Oberthur printing house in France, and the production costs of the first issue of KM banknotes were financed by a donation from the Government of France. The coins were produced by the Royal Mint of Great Britain. Banknotes of the convertible mark were issued in two versions of the design, the design of the Federation of Bosnia and Herzegovina and the design of Republika Srpska, and they differ in the motifs of the person on the front of the banknote, the motifs on the back of the banknote, as well as the order of the Latin and Cyrillic letters. All other features, including size, color and security features, are exactly the same for both versions. The 200 KM banknote was issued in one variant of the design for Bosnia and Herzegovina.

After the banknotes were put into circulation, both versions of the design were soon used completely equally throughout the territory of Bosnia and Herzegovina. Banknotes have been used for a full 25 years, regardless of the design versions, without any differences in the state's payment transactions, and the confidence gained in the convertible mark knows no divisions.

When it comes to convertible mark coins, all coin denominations have a unique design.

The basic design of the banknotes has never been changed, but some security features have been replaced with new ones, in order to better protect the banknotes from counterfeiting, while applying modern technologies and new achievements in this field.

After the first issues of  KM banknotes and coins until today, the Central Bank of Bosnia and Herzegovina has, in order to regularly supply the citizens, commercial banks and businesses in Bosnia and Herzegovina, produced several issues of banknotes and coins and successively released them into circulation, strictly adhering to the rules of currency board established by the Law on the Central Bank of Bosnia and Herzegovina.

The Central Bank of Bosnia and Herzegovina continuously takes care of the quality level of  KM cash and protection against counterfeiting, which ensures the integrity and protection of money in circulation, and thus confidence in the monetary unit of Bosnia and Herzegovina.

Confidence in the convertible mark was maintained even in emergency situations such as global financial crises, the Covid-19 pandemic or turbulences in the financial markets caused by the war in Ukraine, during which a greater demand for KM cash was recorded. In the aforementioned situations, the Central Bank of Bosnia and Herzegovina provided sufficient amounts of KM cash in a timely manner, which reached all those who wanted to withdraw cash from their accounts through commercial banks in Bosnia and Herzegovina. Also, the Central Bank provided sufficient amounts of euro banknotes that were distributed to commercial banks for cash withdrawal requests in EUR, and the full convertibility of the domestic currency in EUR, guaranteed in accordance with the Central Bank Law, has been proven many times.

Today, more than 106 million pieces of banknotes and 490 million pieces of convertible mark coins with a total value of  KM 7.5 billion are in circulation outside the monetary authorities. This value is incomparably higher compared to the value of  KM cash at the end of 1998, when it amounted to KM 162 million, and this value grew from year to year together with confidence in the local currency.

Finally, to conclude  in the previous 25 years the convertible mark became a symbol of monetary security in Bosnia and Herzegovina and  the Central Bank of Bosnia and Herzegovina performed its tasks in order to maintain the stability of the domestic currency in accordance with the currency board.