Guinea-Bissau is a country located on the West African Atlantic coast. It is among the eight countries that form the African Financial Community that was introduced by the French. The French believed that globalization would steer its wheels to these African nations and the only way to embrace it was through a community. In 1997, Guinea-Bissau joined the financial community and had to change its currency from the Guinea-Bissau peso to the West African CFA franc, which is the currency used many countries in West Africa. The currency is coded as XOF in the ISO 4217 currency code and is issued by the Central Bank of West African States headquartered in Senegal.
The Guinea-Bissau peso was a major currency in circulation in Guinea-Bissau from 1975 to 1997, having replaced the Portuguese Guinean escudo. It was minted in the form of coins and banknotes, with the coins being in denominations of 1, 2½, 5 and 20 pesos and 50 centavos, while banknotes in denominations of 50, 100, and 500 pesos were printed in 1975, followed by 1,000 peso notes in 1978, and 10,000 peso notes in 1990. The peso continued to be used in Guinea-Bissau until it was phased out at the rate of 65 Guinea-Bissau pesos for 1 CFA franc.
The CFA franc was established in 1945 in the wake of the Bretton Wood conference as a means of cushioning from the strong devaluation of the franc. In 1958, the CFA became the franc of "French Community in Africa" after Général de Gaulle incorporated the concept of a community to all French colonies of West and Central Africa. In 1994, the CFA franc was devalued by 50% to stimulate economic growth in the region in terms of increasing imports. With the launch of the UMEAO, an economic union of the West African nation, internal tariffs have been reduced to promote trade in West Africa.
The first CFA franc coins were introduced in 1948 as aluminum coins in denominations of 1 and 2 franc. Bronze coins in denominations of 5, 10 and 20 franc were introduced in 1957, all bearing the name Afrique Occidentale Français in Togo, and later the minting of coins was transferred to BCEAO which continues to distribute coins up to date. In 1967, 100 nickel and 50 cupro-nickel coins were introduced, followed by bimetallic 200 and 500 franc coins in 2003 that are still used to date as legal tender in Guinea-Bissau.
The franc was first introduced in 1946 in several denominations including 5, 10, 25, 50, 100, and 1,000 francs. When Guinea-Bissau took over the issuance of the currency, the minimum denomination of the banknote was 50 franc. In 2003, the 500 franc banknote was replaced with a coin due to the devaluation of the currency. In 2004, other denominations of 1,000, 2,000, 5,000, and 10,000 francs were issued with the new notes signifying the rich heritage of West Africa. The 500 franc denoted the advancement in technology, the 1,000 franc was a symbol of education and health, the 2,000 franc symbolized rich network in transportation, the 5,000 franc denoted the rich agricultural field, and the 10,000 franc symbolized telecommunication networks.