Pieces of Eight: The First Global Currency in History

The Pesos Minted in the Indies

There were seven main mints of the Hispanic monarchy in the Kingdoms of the Indies. Hundreds of millions of Pieces of Eight were minted in them:

México from 1535 to 1821
Lima from 1565 to 1824
Potosí from 1574 to 1825
Santa Fe de Bogotá from 1622 to 1821
Guatemala from 1733 to 1821
Popayán from 1758 to 1822
Santiago de Chile from 1749 to 1817

Source: Glenn Murray

Royal Mint of Segovia

The Royal Mint of Segovia is, without a doubt, the most exceptional of all the mints in the history of Spain, including those located in Spanish America.Founded by Philip II, it was conceived and managed as the king’s private property, unlike all the others, which were administered by the Royal Treasury. In its time, it was the most advanced and sophisticated industrial factory ever built, designed to mass-produce a high-quality product with great precision, two centuries before the Industrial Revolution.Its technological advantage lay in the immense power of the machinery driven by the river’s current, which applied force to a strip of silver passing between two cylindrical dies. This allowed for the minting of coins that were more circular, larger, and clearer than those produced by traditional hammer striking.

The Royal Mint. Aerial photo. Author: José Luis Martín Mayoral

The First Global Currency in History I

The First Global Currency in History IThe Spanish dollar, also known as the Piece of Eight, Hard Peso, Strong Peso, or simply Peso, was the main export product of the Spanish monarchy.It weighed 27.47 grams and had a silver purity of around 93%. This consistency over the years made it highly reliable, which is why it became, for more than three centuries, the first “global” currency in history—much like the US dollar today.Nowadays, all international transactions are referenced and settled in US dollars; similarly, from the 16th century well into the 19th century, a significant portion of global trade between countries was conducted using the Spanish Peso or Piece of Eight as the standard currency.

The First Global Currency in History II

A multitude of countries used the Peso or the Spanish Dollar as legal tender across the globe, not only those close to Spain like Portugal or England. Resold Spanish Dollars, bearing the seals of what we might call the “central banks” of the time, have been found in countries as far removed from Spain’s sphere of influence as Sudan, Saudi Arabia, Thailand, Zanzibar, and Burma.

Following the civil wars that led to the independence of the former viceroyalties, the new republics continued to use the coin, and some even still use the name Peso for their official currency.

In China, it was accepted as legal tender until Mao removed it from circulation after the Communist revolution in 1949.

For over 80 years, it was the primary currency of the United States after its independence.

A timeless monetary symbol?

The dollar sign is one of the most powerful and recognisable symbols in the world. Some theories suggest that the origin of the famous dollar symbol could lie in the two columns of Hercules found on the coat of arms of the Spanish Eight Reales, with the “S” representing the ribbon bearing the “Plus Ultra” motto from those columns.Other theories propose that the origin of the well-known “struck-through S” could be linked to the Spanish accounting practice, where it represented the total sum in their financial ledgers.

A possible explanation for the expression "to overlook..."

All European trading companies, which at times were privateers, other times smugglers, and sometimes honest merchants, came to Spain to acquire their Reales de a Ocho or raw silver if they wanted to trade across the world, particularly in the East. Companies such as the Dutch East India Company, the Dutch West India Company, the British East India Company, and later the French East India Company, would arrive with their ships in Cádiz to obtain the reference currency in that part of the world, whether legally… or more or less legally…

Smuggling was always one of the problems of the Carrera de Indias, and it is believed that the expression “pasar por alto” (to overlook) comes from when ships loaded with silver would “pass by the walls of Cádiz”, under the cover of night and with the complicity of those meant to be guarding, certain undeclared goods, including silver and dyes.

Author: Carlos Parrilla Penagos