The evolution of currency over time contains many interesting stories and facts. How we as a society developed from a system of barter to one relying on currency was based on logic and convenience. It has continued to the modern-day system where we see a common currency across many European countries, currency trading taking place on the stock exchange and today the introduction and growth of cryptocurrencies. The future of the currency market is uncertain. One currency that has stood the test of time to date is the British pound. The currency of the UK is the oldest currency in the world.
The British pound dates back over 1,200 years. Sterling silver pennies were first offered in 775AD and the British pound has been around in some shape or form since then with the first proper banknotes as we know them today, established in 1853. Prior to that, the banknote was more of a credit note that needed to be valued and signed by a banker.
Today the British pound is one of the strongest currencies in the world. It is the fourth most traded currency on the stock exchange behind the US dollar, the Japanese Yen and the euro. The euro was introduced in the European market in 1999. While many countries had concerns most joined the common currency agreement, with Britain the most notable exception. At the time the British government stated that the euro failed to pass five critical tests that must have been met for the country to adopt the euro.
The tests, in short, stated that the UK lost too much control over its own interest rate policy and its financial services industry. It felt that what may be the right monetary policy for the UK may not match Europe at the time and currency shifts that may benefit the whole of Europe may not be good for the individual nation. This has proved somewhat true since the inception of the euro as during the financial crisis while countries like Ireland were experiencing housing bubbles and needed to slow down the interest rate, other larger countries like Germany needed higher interest rates to fuel economic growth. Both countries could not be satisfied and the larger country was appeased.
The British Pound continues to be one of the strongest currencies in the world and in the face of Brexit will face many challenges. What the future Brexit world poses for the British pound and wider economic affairs, only time will tell.