The oldest currency still used today: the British pound sterling

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By :  ,  Financial Writer

The oldest currencies still in circulation

Here is a list of the eight oldest currencies still in circulation. There are four major currencies in this list, which we go into more detail below.

Japanese yen

1871

Dominican peso

1844

Falkland Islands pound

1833

Haitian gourde

1813

United States dollar

1792

Serbian dinar

1214

Russian ruble

circa 1200

British pound

circa 800

*according to Britannica

When was currency invented?

It is widely believed the Mesopotamian shekel was the first known form of physical currency. Since then, societies have used many different representations for currency including leather, fur, beads, copper and precious metals like gold and silver.

The first paper banknotes were used in China during the Tang and Song dynasties beginning in the 7th century. These early fiat currencies allowed merchants and wholesalers to perform large transactions without having to account for the heavy weight of metal coins. However, fiat currencies as we know them today were not printed until 1120 by the Chinese government.

What are fiat currencies?

Fiat currencies describe any national currency not backed by a physical commodity, but instead by a government’s promise to recognize their established value. The value of fiat currencies is established by public faith in the government issuing the currency and economic decisions made by its central bank.

Fiat currencies are the basis of every economy around the world. Their invention allowed societies to move beyond bartering systems towards more complex systems of trade. Today, they operate as a tool for the exchange of goods and services and are issued and regulated by national governments.

Fiat currencies work well within our monetary systems because they’re lightweight and carry little intrinsic value beyond what a government has assigned for them. But currencies haven’t always operated in this form.

The easier transportation of paper notes allowed for an increase in international trade, and the currency wars that resulted are some of the earliest examples of foreign exchange. Foreign exchange, or forex, is a global network where traders exchange currencies. Traders speculate on the impact of global and national economic news on exchange rates, but they also influence those rates themselves through the mass quantities of currencies being traded.

The foreign exchange market is the most traded market in the world. Forex markets averaged over $6.6 trillion in trades every day in 2019. Meanwhile stocks average $553 billion per day for the same year.

Learn more about foreign exchange

Gold and silver standards

In the late 19th century, many countries began adopting the gold standard. The monetary system backed each note of currency with a fixed quantity of bullion gold. An international gold standard was established in 1871 after many influential countries had already set their own gold standards. Previously, a silver standard had been used in some nations like the US due to its higher availability.

Eventually, though, economic growth outpaced the supply of gold. That – along with an increase in debt among nations during World War I – brought about the end of the gold standard. In its place countries began accumulating reserve foreign currencies to back up their own: mainly the US dollar and British pound. These two currencies are some of the oldest and strongest currencies in the world today.

Japanese yen: the fourth oldest major currency

While number eight overall, the Japanese yen is the fourth-oldest major currency. The yen was introduced in 1871, and since its inception has experienced several devaluations to the point that common banknotes come in values of ¥1,000, ¥5,000 and ¥10,000.

Because of the extremely low value of a single yen, currency pairs featuring the yen as the quote currency often have pip values in the tenth decimal place. Meanwhile, other currency pairs typically have pip values in the thousandth decimal place.

Despite this low value, the yen is extremely popular in forex markets. It is the third-most traded currency overall. The Bank of Japan maintains an extremely low, and sometimes negative, interest rate which makes the yen popular in carry trade strategies.

To learn more about the yen and its unique place in the forex market, read our full guide on the Japanese yen

US dollar: the third oldest major currency

The US dollar was created in June 1776, several days before the country officially declared independence on July 4, 1776. While third among the majors, it is technically the fourth oldest currency behind the Serbian dinar.

The US dollar is now the most traded currency across the globe and makes up the largest percentage of foreign currency reserves of any currency across the globe. EUR/USD is the most traded currency pair in foreign exchange markets.

The dollar is influenced by typical economic factors:

  • policy announcements from the US’s central bank
  • the Federal Reserve
  • inflation
  • US economic data
  • geopolitical events

Any large changes to the US economy often reverberate across other national currencies because of the dollar’s outsized influence on the global economic market.

Learn more about the US dollar in our in-depth guide to USD

Russian ruble: the second oldest currency

The Russian ruble was created in the 13th century and features a double-headed eagle, orb and scepter. The currency has been revalued many times in its long history. At one point it was even taken out of circulation.

The value of the Russian ruble is most impacted by the Central Bank of Russian Federation, inflation, geopolitics and oil prices. The ruble is considered a commodity currency because of how impactful the price of crude oil is to the currency’s value. Russia is the leading producer in natural gas and second in crude oil production.

Russia is also home to the fifth-largest number of billionaires out of all countries, according to a Forbes report from 2021. Despite all of this financial power, geopolitical issues involving Russia such as the country’s invasion of Ukraine in 2022 have complicated the ruble’s stability and availability to trade on forex markets.

British sterling: the oldest currency in circulation

The British pound sterling is the oldest currency still in circulation today, dating all the way back to 800 when it took the form of silver pennies. The nickname “pound” originates from the measuring system first used to value the coins. At the time 240 sterling coins weighed one pound. Today one pound is divided into 100 pence, and the currency is represented by paper banknotes and £1 and £2 coins.

The British pound sterling is the fourth most traded currency on the forex marketplace. It features heavily in major, minor and exotic currency pairs. Like most modern major currencies, the pound is heavily influenced by monetary policy from the Bank of England, inflation, UK economic growth and trader sentiment.

The most popular currency pair featuring the pound, GBP/USD, often moves similarly to EUR/USD. However, GBP/USD is negatively correlated, meaning it usually moves opposite to, with EUR/GBP.

Learn more about the world’s oldest currency in our extensive guide to the British pound sterling

Did you know you can trade currencies on the foreign exchange market? Learn more about trading currencies and open a demo trading account to practice with free, virtual funds.

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