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The History Of The British Pound

The British Pound, the pound sterling, or more commonly, the pound, is the currency used in the United Kingdom. The pound sterling holds the title of the oldest currency still in use today. Its origins date back to around 760 during the reign of King Offa of Mercia. King Offa introduced the silver penny, which quickly spread in through the Anglo-Saxon kingdoms and became the standard coin in what is now known as England.

The early pennies, from about 760 to 1158, were struck from fine silver. However, in 1158, King Henry II introduced new coinage struck from 92.5% silver, which became known as the sterling pound. These new sterling silver coins were much more durable than the previous fine silver coins, which in turn allowed them to last longer in circulation. Silver pennies were often the sole coinage used from the eighth century to thirteenth century. It was very common to break off parts of a penny to make change, but sometimes the half penny and farthing were struck.

British currency was exclusively silver until the introduction of the gold noble in 1344. The percentage of silver in the coinage continued to fluctuate throughout the Tudor reign, but silver remained the basis for legal tender. Paper money was introduced in 1694 and soon the legal basis changed to gold. The shilling was introduced in 1487 and the pound in 1489, both extremely important coins in the history of the British Pound.

During the Napoleonic and Revolutionary wars, the legal tender was the notes issued by the Bank of England and their value was based on gold. During 1816, gold was officially adopted as the standard and silver coinage was reduced to silver “tokens”, meaning they were no longer worth their weight in silver. As other countries, during the 19th and 20th centuries, adopted the gold standard, it became very easy to determine conversion rates between different countries. This revolutionized trading and international economy.

While the British Pound has seen many variations during the centuries, it has remained a staple and oftentimes the strongest currency in the world. By not choosing to join the European Union and adopt the Euro, the United Kingdom has made a brave and controversial decision, but it remains the highest worth currency in the world. While its worth does fluctuate because it is traded on the free market, it is always one of the highest value currencies in the world.

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Created - 12/01/2009 | Last Updated - 01/24/2011
Comments?
Informative article and quite helpful.
Posted on 2011-03-18 by: Ghulam

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