With the United States as the great world power, the dollar was consolidated as the main world currency. However, this was not always the case, since for several centuries, the Spanish real de eight was the great reference currency at the international level.
Throughout history, the economy and currencies in particular, have been key in the development of societies. Thanks to coins, it was possible to pay the salaries of colossal armies, trade with distant nations and peoples, or buy wills through the notorious bribes. And it is in this historical chapter of coins where Spain played a very important role.
If Italian coins had been predominant in trade during the Middle Ages, around 1497, the Spanish Empire minted a coin that would be the great protagonist in international trade. We are talking about the real of eight, which would reach an importance that has nothing to envy to the pound in times of the British Empire or the current US dollar.
Thus, the real functioned as a commercial reference while serving to pay for the expansion of European powers to other continents. In fact, many other coins were inspired by the Spanish real de a ocho. We are talking about currencies such as the United States and Canada dollars, the currencies of Latin American countries, the Philippine currency or even the Chinese yuan.
A coin of great purity
“The real would be a silver coin that instilled great confidence, since its purity was nothing more and nothing less than 93%.”
Because silver was essential in the economy of the Spanish Empire, the real became the great pillar of its economy. Thanks to the silver mines discovered in the American continent, the Spanish Empire would have enough silver to mint eight reales. Here the discoveries of the Spanish metallurgist Bartolomé de Medina would be key, which considerably facilitated the extraction of silver.
Thus, with the discovery of the New World, the Mediterranean would no longer be the main commercial area. All this caused the decline of Italian coins, which had been protagonists in the Middle Ages and contributed to boost the real as the main currency.
Precisely as it is a mercantile economy, based on the accumulation of precious metals, the real would be a silver coin that instilled great confidence, since its purity was nothing more and nothing less than 93%. It would also help in its adoption that it was a tax-free currency in transport and that, due to its high silver content, it was not necessary to re-mint it.
Although the real began being produced only in Spain and in the empire’s possessions in America, over time it would end up being minted in remote places such as China, the island of Ceylon (currently Sri Lanka) or in areas of Africa such as Sudan and the island of Zanzibar. . In fact, it is estimated that a third of the reals in Europe were re-minted in the Netherlands, France and England.
The real de a ocho, the great key element of international trade
“Trade was decisive in the adoption of the real de a eight, being introduced by European merchants in their transactions with the Ottoman Empire and with the Arab countries.”
We already know that the eight-dollar real was a currency that provided great security due to its very high silver content, but how did it spread throughout the world? What were the causes that made the real a planetary currency?
Trade was decisive in the adoption of the real de a eight, being introduced by European merchants in their transactions with the Ottoman Empire and with the Arab countries. Its expansion went beyond the Middle East and traders from various European nations took it to areas such as China and India. The real of eight was so in demand that whoever wished to do business in China and India had to carry reals, even in the 19th century.
While the real had a great reception in commercial exchanges in America and Asia, it also became the great currency of the economy of the African continent.
Even when Spain was no longer the great world power, in the East they were reluctant to adopt new coins. Thus, when Great Britain emerged as one of the main political and commercial powers, it had to adopt the real by eight, since the territories where the real was used showed great reluctance when it came to adopting the pound.
Indeed, trade greatly facilitated the expansion of the eight-dollar real, but looting by the Dutch and English also contributed to the eight-dollar real being adopted worldwide.
Influence on other currencies
“The so-called Spanish Dollar seems to be behind the famous design of the dollar with an S crossed by two vertical bars.”
We mentioned earlier that the eight-dollar real had had a great influence on the development of other currencies, such as the US dollar. Well, after the United States battled Great Britain for independence in the 18th century, the country needed a legal currency for its economy. Because more reais were minted in Mexico in a month than in Europe in an entire year, the Americans decided to introduce the eight-dollar real as their legal tender.
The absence of indigenous currencies caused Americans to place their trust in the real until 1857, when the United States had its own currency. Furthermore, the so-called Spanish Dollar seems to be behind the famous design of the dollar with an S crossed by two vertical bars. Thus, there are those who suggest that the bars were taken from the columns of Hercules that appeared in the currency of the real, while the S has its origin in the word Spanish (Spanish).
The impact of the eight-dollar real on the US economy would go beyond symbols and end up transcending the stock market. This is the case of the New York Stock Exchange, where until 1997 the eighth of a dollar was taken as an indicator of the value of the shares of listed companies.
A very interesting story, because as can be seen, we are talking about a Spanish coin that went around the world. A currency that conquered the rulers of the time beyond the Spanish borders, setting a precedent, as we see, for such important currencies as the dollar, the latter being the most important currency in the world today.