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Why Were Krugerrands Illegal?

Krugerrands are bullion coins that were first minted in 1967 by the South African Mint and the Rand Refinery. The coins are made from gold and have a face value of one South African rand. They have been popular with collectors and investors worldwide since their release. Although importing Krugerrands was illegal for a brief time in the United States, there is still some confusion on the legality of the bullion coin today.  

The Controversy Over Krugerrands

The South African Government introduced the Krugerrand in 1967. Gold demand stayed high for the following ten years. At the market’s peak in 1979-1980, the Krugerrand was one of the bestselling gold coins globally. 

As more people worldwide became aware of South Africa’s Apartheid policies, the Krugerrand gold coin lost popularity, especially as other competing gold coins were introduced to the market. In 1985, the United States Raegan administration called for the ban of importing Krugerrands in protest of apartheid. This American ban had a significant impact on South Africa’s economy. Premiums on Krugerrands fell below those of other competing bullion coins.  

Many investors misunderstood this ban and thought Krugerrands were illegal to own in the U.S. when the ban was on importing more Krugerrands rather than owning them. The ban was lifted in 1991 when the South African government took serious steps to end apartheid. Ever since then, Krugerrands have been legal to import, and they have always been legal to own. 

The ban on Krugerrands had a dramatic impact on the global bullion market. The 1985 ban on importing Krugerrands directly led to the creation of the American Gold Eagle. The US Mint stepped in to fill the void left by the Reagan administration’s ban and modeled the iconic coin after the Krugerrand. Vintage gold coins produced in America before this were made of 90% gold and 10% copper. And most modern bullion coins are .999 fine gold, also known as 24k.

The Krugerrand is 22k gold. This is a mixture of 91.67% gold, 3% silver with the remainder comprised of copper. The US Mint followed the roadmap laid out by the Krugerrand, and the Gold Eagle remains 22k today. Not only did the US Mint copy the composition, but they also mimicked the dimensions by offering four sizes that were identical to the Krugerrand. The Gold Eagle replaced the Krugerrand as the gold bullion coin of choice during the import ban and it has remained so even after the ban was lifted.    

Krugerrands Today

Today, Krugerrands are still considered one of the most popular gold coins in the world. They are legal to buy and sell and for countries to import and have been since 1991. These coins remain a smart and secure investment if you are interested in investing in gold.  

At APMEX we have a large selection of Krugerrands that you can view and compare to other coins. As a major online retailer of precious metals, we can attest to the popularity of this series among precious metals enthusiasts.

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