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The English currency pound sterling – GBP for short, currency symbol £ – is not only considered the oldest currency in the world, but also the most stable. The coinage system is now more than 1200 years old. However, there is a great deal of mystery surrounding the designation of the term “Sterling” and its introduction. As early as the Middle Ages there was speculation about the etymology of this word. Also the origin of the term “penny” is still not clear.
Etymology: pound and penny
The term pound was already in use as a currency unit 1300 years ago and has remained unchanged ever since. In the course of time, it has also been used as a quantity for the English monetary system.
Already in the 8th century the Saxons – as the first people after the Romans – began to mint coins again in England. The so-called Sceattas, which means “treasure”, were made of silver. The minting of pennies began towards the end of the first millennium, shortly before the Vikings invaded. There are two theories about the etymology of the name:
- The name goes back to the Saxon king Penda.
- The term has the same origin as the words Penny (eng.), Pfennige (German) and Penge (Scandinavian).
It is assumed that both the term pound and penny have been used in the sense of pledge.
Introduction of the pound
Due to the Danish invasions, the English kings were forced to drastically increase the production of coins at the beginning of the 10th century. This money was intended as a kind of protection money for Danes – the so-called “Dane money” – but was also used to finance defence.
In 928 King Athelstan had the Statute of Greatley passed, which introduced a single currency for England. This served primarily as a means of control, as up to 30 mints were operated at times. However, due to the ongoing conflict, this project could only be finally realised in 1066 and has remained unchanged as GBP to this day.
The term pound was introduced into the monetary system at this time, as large sums of money were often transferred. One pound corresponded to 240 pennies, whose weight was adjusted accordingly.
The term sterling first appears as “esterlin” in a French document at the end of the 11th century. It is known that only a certain type of silver was called sterling, from which the English silver pennies were also minted. However, it remains unclear whether the word is derived from a special coin called “Steorling”, translated “coin with a star”, or whether it is used as a reference to the “Ostlinge” or “Easterlinge”, the inhabitants of the Hanseatic cities.
International position of the GBP
The GBP or Great Britain Pound, i.e. the pound sterling, has gone through several ups and downs to this day and lost its dominance as a reserve currency against the US dollar in 1944 in the course of the Bretton Woods system. Nevertheless, it is one of the four most traded currencies in the world. The GBP is also still popular as a reserve currency and ranks third in this category. Since 2008, the once strong Pound has been increasingly converging to the value of the Euro.
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