Set Description:
INDEPENDENCE:
On August 24, 1991 the Verkhovna Rada (Parliament) of Ukraine adopted “The declaration of state Independence of Ukraine”, thereby becoming an Independent State. As the U.S.S.R. was unraveling, 1988-91, several other countries also declared Independence, establishing Governments, holding elections and hammering out monetary policies. By the end of August of 1991 there were fifteen newly Independent Countries that had broken from the former Soviet Union. With the U.S.S.R now dissolved a new regional intergovernmental organization was quickly formed, on December 8, 1991 the Belovezh Accords were signed, declaring that the [Soviet] Union effectively ceased to exist and proclaimed the Commonwealth of Independent States (CIS) in it’s place. The newly formed organization, which also included Russia, allowed for commerce to continue throughout the region uninterrupted and allowed time for separation in an orderly manner between Countries. Within the CIS was what was eventually called the Ruble Zone, comprised of the fifteen former republics of the Soviet Union.
A NEED:
At the moment of its declaration of independence from the Soviet Union the circulating currency of Ukraine was the Soviet Ruble. Ukraine, as with the other former Soviet republics who joined the CIS, continued to use the Ruble after their Independence until new national currencies could be introduced and their economies stabilized. In late 1991 and early 1992, Ukraine experienced shortages of Ruble banknotes when the Central Bank of Russia failed to deliver sufficient quantities of notes for circulation, in response to this cash shortage, and in fear of a siphoning of Ukrainian goods into Russia as a result of the higher prices in Russia, Ukraine introduced reusable Coupons, or Control Coupons.
RELEASE:
On September 9, 1991 the Verkhovna Rada adopted the resolution “The release into circulation of reusable coupons since January 1, 1992”, clearing the way for release of Coupons into everyday commerce. Control Coupons were considered to be provisional currency operating in parallel with the Soviet Ruble during the changeover period. The first series of reusable Coupons were released into circulation on January 10, 1992 in denominations of 1, 3, 5, 10, 25, 50 & 100 Karbovantsiv, which circulated on par with the Soviet Rubles initially.
USAGE:
Coupons were at first required to be used in tandem with Soviet Rubles for the purchase of consumer goods. Beginning In January Coupons were distributed to the public once a month, along with paychecks, at the rate of 25% of monthly income, but no more than 400 Karbovantsiv. By February the rate was increased to 50% and in March to 70% with a limit of 450 Karbovantsiv.
RESULT:
Unfortunately, the printing and issuance of the Coupons had an unforeseen side effect for the Ruble Zone. Since Countries like Ukraine could, via money creation, double the domestic cash supply, which also increased the Ruble Zone money supply, demand for products continued to rise along with prices, helping to fan the flames of rampant inflation. Meanwhile, Russia, in a desire to maintain its central role in an empire, continued to allow CIS members to maintain large credit payment balances, supplementing the uncontrolled spending of the CIS Countries. By the summer of 1992 the Central Bank of Russia (CBR) realized that it was impossible to control the monetary policy in the Ruble-Zone if the Republics refused to give it the right to have a monopoly on the printing of money. In July of 1992, the CBR finally refused to clear payments by large creditor Republics. These actions helped to slow the inflation rate of the Ruble when compared to the Coupons but both still continued to fall steeply against the USD. The exchange rates of Karbovanets to Rubles reflects this as when Coupons were initially released in 1992 they were considered on par with the Ruble 1:1, by the end of 1994 the exchange rate had fallen to 10:1. By the time monetary reform had been enacted in Ukraine in 1996 the Coupons, suffering from four years of hyperinflation, were redeemable at a 100,000:1 when the Hryvnia was introduced as the new national currency. 100,000:1 essentially being the exchange rate of Karbovanets to USD at the time.
Rampant hyperinflation from 1992-1994 and failed monetary policies marked the end of the first series of Control Coupons, as higher denominations were required for everyday commerce. In addition to larger denomination notes, better-quality notes with more robust security features would need to be produced as the introduction of the Hrynia was still several years off. All first series coupons were withdrawn from circulation by October 1, 1994.
DESIGN/COUNTERFEITING:
The first series Coupons were released in denominations and primary colors matching the Soviet Rubles that circulated at the time. This allowed them to be used on par more easily and made identification simpler when using both Coupons and Rubles.
Coupons of 1 Karbovanet (light-brown), 3 Karbovantsi (grey-green), 5 Karbovantsiv (Blue), 10 Karbovantsiv (pink), 25 Karbovantsiv (Violet), 50 Karbovantsiv (green) and 100 Karbovantsiv (gray-brown) were designed and issued.
The design of all first series Coupons is identical across all notes/denominations.
On the face, left, is a depiction of Lybid from the Monument to the Founders of Kyiv, located in Navodnytskyi Park in Kyiv. Lybid is the sister of the legendary founders of Kyiv, the brothers Kyi, Schek and Khoriv. The full sculpture depicts the four siblings in a boat atop a pedestal, with sister Lybid at the bow with her arms outstretched, while the three brothers are standing together near the stern. To the right of the depiction of Lybid is the text “UKRAINE”/ “COUPON”/ numeric denomination/ “Karbovantsiv”/”NATIONAL BANK OF UKRAINE”/ and the date.
On the back, left, is depicted the Cathedral of St. Sophia in Kyiv. On the right side of the note is ornamentation, and in the four corners is the numeric denomination with ornamentation.
Due to their assumed short-term use in circulation, and their hasty production, security features are virtually nonexistent on these notes. However, they do contain some UV security features in the form of UV fibers embedded in the paper, UV ink used for the background on the face and parquet watermarked paper. Some notes, in each denomination, contain a latent imprint located to the left of Lybid on the face of the note. No prefix or serial numbers were added to any of the first series Coupons.
The first series Coupons were subject to mass-counterfeiting, generally on color inkjet printers. The 1 Karbovanet Coupon being the most popular target as the 1 and 100 Karbovantsiv notes have similar color ink, light-brow/grey-brown, and adding a few zeros to a 1 Karbovanet note netted a 100x profit. Lower denomination notes were often used for the paper, then the ink was removed and a higher denomination printed on the blank note. According to the National Bank of Ukraine an estimated 14 Billion worth of Karbovantsiv were counterfeited.
All first series coupons were printed by Imprimerie Speciale de la Banque de France, (ISBF).
VARIETIES/ERRORS:
Notes were issued in each denomination with and without latent imprint. If present the imprint will be visible under UV light to the left of Lybid. Some references will break this down further, listing a variety of visible latent imprint without the aide of UV. I do not personally differentiate between this and with latent imprint.
There are at least two ink color variants in the 10 and 25 Karbovantsiv notes, the 10 Karbovantsiv notes having pink and red variants, with the 25 Karbovantsiv having violet and purple varieties. Additional color variants could exist in other denominations.
Error notes of all types are known in this series, with missing face printing, P# 83x (although listed as an error note in the SCWPM, this is more likely a proof or printer's scrap), and obstructed printing on face P# 81x being the most common.
Specimens, proofs and unissued notes are covered in my signature and specimen sets.
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