Arcacian dollar

The Arcacian Dollar (sign: $, code: ARD) is the official currency of Arcacia. Within Arcacia it is almost always abbreviated with the dollar sign ($) with ARD$ sometimes used to distinguish it from other dollar-denominated currencies. It is subdivided into 100 cents.

History
Prior to the inception of the Arcacian Dollar the British Pound Sterling and the French Franc were used and, for the purposes of local commerce, were pegged to each other and seen as equals. This was done as much for local convenience as it was for local diplomacy, the British and French having conjointly settled Arcacia. Only the Pound Sterling was used for international trade, however.

The issue of a separate currency for Arcacia was first discussed in the 1840s, with a special meeting of the Senate resolving a referendum to adopt a new currency for Arcacia. The referendum to adopt a new currency passed virtually unanimously. The name "Dollar" was selected as it was considered the most neutral with "Pound" being considered too British and "Franc" considered too French. "Crown" was considered but decided against as the only other nations to use that nomenclature were monarchies.

The Arcacian Dollar was on the Gold Standard from its inception in 1850 until after the Great Depression. When Great Britain abandoned the Gold Standard in 1931, it was viewed by Arcacia as the beginning of the demise of the Gold Standard and Arcacia abandoned it in 1932. In order to allow Arcacians to continue trading in the nations gold reserve, Gold Bonds were issued from 1933. These were discontinued in 1966 with the introduction of Premium Bonds.

The first banknotes were issued in 1850 with only the $1, $5 and $10 being printed as no higher denomination was needed. The first coins were also issued, with ¼¢, ½¢, 1¢, 5¢, 10¢ and 20¢ being minted, alongside the Sovereign and Half Sovereign gold bullion coins which were only used for investment, international trade or very large transactions. This was the extent of the currency until 1945 when the ¼¢ and ½¢ were withdrawn from circulation and the $20 note and 50¢ coin introduced. The $50 note was introduced in 1973 and the $100 note in 1984 to coincide with the introduction of those denominations into the neighbouring Australian Dollar. Also in 1984, the $1 note was replaced with a coin. The 1¢ coin was withdrawn in 1990, after which, prices in Arcacia were rounded to the nearest 5¢ when paying in cash. The $2 coin was introduced in 2000.

The Dollar was introduced in Lycanthia in 2010 as the amicable protectorate agreement came into effect, replacing the Pacific Franc. A new currency for Lycanthia was planned to be introduced at the conclusion of the agreement in 2020 but was brought forward by 8 years as the Lycanth population resent using the Arcacian Dollar. The Lycanth Franc became the official currency of Lycanthia on the 1st of January 2012.

Coins
Produced by the Arcacian Treasury, Arcacian coins have medallic orientation, as do Australian and most other Commonwealth coinage, Japanese Yen coinage, and Euro coinage. This is in contrast to coin orientation, which is used in United States coinage.

Banknotes
The banknotes of the Arcacian Dollar were first issued in 1850 when Arcacia adopted its own currency. The current series was issued in 2000. Security features include a laser-readable holographic plastic strip on the front which covers a magnetic strip containing the serial number, date of issue and a unique code. The serial number is printed twice on the front and once on the back of the note.

Commemorative Issue
Only one commemorative banknote has been issued, a special $200 note to celebrate Arcacia's Bicentenary in 2012. Although Arcacia was first settled in 1810, it was not proclaimed a nation until 1812, so anniversaries are counted from proclamation, not settlement. The commemorative $200 bears a picture of Ciaran O'Brae, Arcacia's first elected president, and the floorplan of the Capitol on the front. On the back is a depiction of the Pacific Tower, Arcacia's first skyscraper, and the original 1812 constitution. The bicentennial dates (1812-2012) are present on both the front and back. The wave pattern is in the colours of the flag and the reflective strip is silver.

Bullion Coins
Arcacia also issues bullion coins struck from pure silver and gold. Their face value is considerably lower than their weight value and as such they are not used as currency for their face value (though they are legal tender), instead being traded for their bullion weight and kept as investment pieces.

Premium Bonds
A Premium Bond is a lottery bond issued by the Arcacian government's National Savings and Investments scheme. The government promises to buy back the bond, on request, for its original price. The government pays interest on the bond (pegged at 3% in July 2010). But instead of the interest being paid into individual accounts, it is paid into a prize fund from which a monthly lottery distributes tax-free prizes, or premiums, to those bond-holders whose numbers are selected randomly.

Bonds can be purchased for any whole dollar amount from $1 to $1,000. Each person may own up to $50,000 in Premium Bonds. Investors can purchase bonds at any time. Bonds need to be held for a full calendar month after the month they are purchaed, e.g purchase in January eligible for March. Their numbers are entered each month, with an equal chance of winning any prize, until the bond is cashed in.

The prize draw is conducted so that the winners of the jackpot can be notified on the first working day of the month, although the actual date of the draw varies for administrative reasons. The online prize finder is updated by the third or fourth working day of the month. There are many different prizes ranging from $25 to $1,000,000. Premium Bonds can be purchased and/or cashed in at any Post Office. Prize money is distributed by cheque.

Premium bonds replaced Gold Bonds and are far more secure, being registered and non-transferable. Loss or destruction of the paper does not equal destruction of the instrument as it is stored electronically and is automatically entered in draws. Premium Bonds can be reissued if necessary at a cost of 50¢ per bond. Bonds are attached to a person's account and so can only be cashed in by the registered owner of the bond. This is in contrast to Gold Bonds, which were bearer bonds and could be cashed by whomever held the physical bond. Loss, theft or destruction of the bond meant loss of ownership of the instrument.

Exchange Rate
After abandoning the Gold Standard, the Arcacian Dollar was initially pegged to the US Dollar under the Bretton Woods System at USD$1.60 = ARD$1.00. This changed to USD$1.20 = ARD$1.00 with the devaluation of the British Pound Sterling. Following the devaluation of the US Dollar relative to gold in 1971, Arcacia pegged its dollar at USD$1.20 with a 5% fluctuation range, keeping the same gold value. From 9 July 1973 until 30 June 1986, the dollar's value was determined from a trade-weighted basket of currencies.

The ARD$ was floated on 1 July 1986 at the initial rate of USD$0.50. Since then the dollar's value has been determined by the financial markets, and has been in the range of about US$0.89 to 1.28. The value of the Arcacian Dollar, though not pegged to it, has largely followed the Australian Dollar. The Arcacian Dollar typically trades at ~AUD$1.10, which as of January 2012 gives the Arcacian Dollar a value of USD$1.13