Banknotes and the monarchy
With the recent sad death of The Queen one of the many changes being unrolled over the next few months includes the use of the likeness of King Charles III on our coins and banknotes. The Royal Mint has now unveiled the official coin effigy of His Majesty’s likeness, which will be used initially on a special £5 Crown and 50 pence, commemorating the life and legacy of Her Late Majesty Queen Elizabeth II.
But perhaps a bigger question is why do we have the monarch’s likeness on our currency? How in fact did the monarchy get involved with our currency in the first place?
Where did it all start?
With bartering being the earliest form of trading, it didn’t take long before people found carrying chickens and beans around a little cumbersome, so by the 3rd millennium BC, pure gold took the form of ‘money’ in Egypt. Golden rings, with standardised weights and values called ‘deben had different values and were used for trading.
The world’s first coin, made from an alloy of gold and silver, was produced by the Lydians (now part of Turkey), around 600 BC. But even in those days, fraud existed, and it wasn’t long before they had to find a way to ensure a coin’s face value wasn’t different from the actual value of the coin.
King Athelstan leads the way
Although the first coins were struck in the British Isles 2000 years ago copying designs from Greek coins, the pound sterling was only introduced as a unit of currency in 775 AD in Anglo-Saxon England.
Then, when Athelstan, the first King of England came into power in 928 AD, sterling was adopted as the first national currency, with Royal Mints being set up around the country. These silver coins proudly bore the monarch’s royal likeness wearing a crown. And if you were lucky enough to have a one pound coin (the equivalent weight of the silver) you could even buy 15 cows with it.
The first bank note issued in England was in 1695 by the Bank of England, set up in 1694 to raise money for the funding of the war against France. From 1871, when the Gold Standard came into being, the currency issued was seen as being equivalent to something of value. This came with the wording on these notes promising, ‘To pay the bearer the value of the note on demand’ – a guarantee the Bank of England would honour this promise.
It was only in 1960 that a monarch’s likeness was used on paper currency in England, with the one pound note featuring a likeness of the young Queen Elizabeth. Like her forebears, though, she’d featured on coins as soon as she ascended the throne in 1953. It’s believed that having the reigning monarch on currency gives legitimacy to show that this is ‘real money’.
Looking to the future
Another question we could ask is: who might be the last British monarch to appear on actual currency? As digital forms of transacting are overtaking cash usage, might there be a time when cash is no longer produced? Today, in our increasingly digital world, cash is still widely accepted, and of course you can still go to an ATM with a payment card and draw out money in cash.
With advances in digital currencies, we are perhaps offered some insight into what the world might look like in regards to payments in the future. The recent developments in Central Bank Digital Currencies (CBDCs) see digital currency as an extension of physical money. CBDCs are issued by the central bank and therefore enjoy the same legitimacy as traditional money.
CBDCs differ from cryptocurrencies, which are decentralised tokens. With CBDCs, trust is embedded from the fact that it’s issued by the central bank, whilst trust in cryptocurrency relies on the concept of consensus.
What is in store for physical currency may remain speculative but at Accomplish, we find ourselves going right back to the early Egyptians with our latest digital payment systems, including a payment card in the form of a ring as a means to purchase.