When we think of microstates, the Vatican, Andorra and even Switzerland’s sister Liechtenstein tend to come to mind. However, deep in the heart of the alpine nation is a town which has held on to its history as an independent nation, and still has its own currency. Welcome to the Republic of Gersau.

The Republic of Gersau explained

At first glance, Gersau seems quite unremarkable at least by Swiss standards. Nestled on the banks of Lake Lucerne, the town of 2.300 people sits amid stunning mountains and is officially part of Canton Schwyz - though don’t tell the locals that.

Despite forming a small part of the canton today, the story of this small town is rich, having been an independent state for over 360 years called the Republic of Gersau or altfrye Republik Gersau (Old-free Republic of Gersau). Here’s the story of the old microstate nestled in the heart of Switzerland.

Why was Gersau an independent state?

Gersau was first developed by the Austrian Habsburgs in the 14th century, but quickly allied with the Old Swiss Confederacy in 1359. At the time, the area around Gersau came under the control of Canton Lucerne. Then, in 1390 the residents of Gersau purchased their independence from Lucerne and in 1433, none other than the Holy Roman Emperor Sigismund made Gersau an imperial free state. 

This created the tiny Republic of Gersau, which controlled its own affairs between 1433 and 1798 - though during this time the republic was allied and protected by the four “forest cantons” that surrounded it (Lucerne, Schwyz, Uri and Unterwalden). Its flag will be familiar to residents of Canton Ticino and fans of FC Basel, consisting of a red and blue stripe.

However, this free-state status was not to last. In 1798, following the French invasion of Switzerland, Gersau was dissolved and incorporated into the Canton of Waldstätten of the short-lived Helvetic Republic. After a brief spell of independence between 1814 and 1818, the Federal Diet of Switzerland officially annexed Gersau - against the will of its people - and incorporated it into Canton Schwyz.

Gersau maintains its own currency, the guilder

Today, Gersau honours its independent history by having its own currency, the Gersau guilder. "Since 2014, the Gersau guilder can be used to pay in restaurants, hotels, at the hairdresser, in the beauty salon and at the local Volg…the guilder is recognised throughout the old republic,” a Gersau Tourism spokesperson told 20 Minuten.

The coins have proven to be a hit, with the spokesperson adding that they have been forced to mint extra guilders to keep up with demand. For those interested, much like pounds issued by banks in Scotland or England, the exchange rate is equal, one Gersau guilder to one Swiss franc.

Swiss towns are free to create currencies, government confims

Interestingly, the Federal Department of Finance confirmed to 20 Minuten that any town or local council in Switzerland that wants its own currency is free to make one. "An authorisation from the federal government does not have to be obtained," spokesperson Michel Girord explained.

This has led several Swiss towns and cities to make their own currencies, in a bid to keep business and money within their borders. However, none of these new coins have the history that the Republic of Gersau offers.