United Kingdom Currency
The History of Pound Sterling
The British Pound, more commonly called the pound, is the oldest currency still used in the world. King Offa of Merica introduced the silver coin in 760, which was made out of fine silver until 1158 when King Henry introduced a coin that was 96.7% silver. The shilling was adopted in 1487 and 1694 paper money was created. By the time of Napoleon's reign, all coins in England no longer held their weight in silver.
What type of money is a pound?
Throughout English history, the pound has changed from commodity money to representative money and now fiat money. Although coins were originally silver and gold, the coins are no longer pure silver. The pound has value because it was declared by the United Kingdom government and it has been accepted by the citizens.
Evolution of the Pound
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Properties of the Pound
- Durability: The British pound is no longer pure silver and is made out of nickel, a very durable substance that doesn't just fall apart.
- Portability: The British pound, like American money, is very small and easy to carry around. They are lightweight and can be carried in wallet, pants pocket, etc.
- Divisibility: The British pound can be divided in many ways, 1 penny, 2 pence, 5 pence, 10 pence, £1 and £2 are coins and notes (paper money) are £5, £10, £20 and £50.
- Uniformity: The Bank of England makes all banknotes and the Royal Mint makes all British coins. The reverse sign is changed on British money every year and spacing on the words of the coin are even, so it is very hard to counterfeit.
- Stability: The British coin is among the most stable currency in the world. It is the fourth most traded currency globally and has the highest worth out of all other currencies.
- Scarcity: The amount of pounds in circulation is controlled by the Bank of England who sets the pound's monetary policy.
- Acceptability: The British pound is the only accepted form of currency in the United Kingdom and is also accepted in Jersey, Isle of the Man, South Georgia and the South Georgia Sandwich Islands.
American Dollar vs. British Pound
The American dollar has the equivalent of .66 British pounds.