Professor Chris Howgego carefully cradles the medal struck for the coronation of young King Edward VI in 1547 as he reflects on the history of money from Babylon to bitcoin.
“It’s all about trust,” says coin keeper Heberden at the Ashmolean Museum in Oxford. “Coins are just a form of currency. Anything that can be used as payment is money.
Howgego cites Papua New Guinea as an example of what it means. Pearly shells were once used there as currency, which is why the word shell – kina – is now the name of the national currency. He adds: “In the past, the Chinese used rice as currency – at least you could eat it!
Money is never really out of the news, but there has been even more attention than usual in recent months. One of the reasons is inflation, which has re-emerged as a problem in the UK and other Western countries for the first time in decades. One of the functions of money is as a store of value, and a basket of goods and services that would have cost £100 a year ago costs £109 today.
The other reason is the debate over the safety of digital currencies after the collapse of the “stablecoin” terra, and whether in fact cryptocurrencies are really money.
Stablecoins are meant to hold their one-to-one value against a non-digital currency – but terra has suffered an old-school banking run as investors test whether it can hold its own.
Kristalina Georgieva, managing director of the International Monetary Fund, made her feelings clear during a speech in Davos last month. “If a stablecoin is backed by one-to-one assets, it is stable. When it’s not backed one-to-one but claims to give a 20% return, it’s not stable – it’s a pyramid that eventually crumbles.
Andrew Bailey, the Governor of the Bank of England, has said that anyone investing in cryptocurrencies must be prepared to “lose all their money” because they have no intrinsic value. This is a point of view that Georgieva seems to share. “Bitcoin may be called a coin, but it’s not money,” she said in Davos.
In the end, banknotes printed by governments also have no intrinsic value, but are money because people accept them as such. Howgego says digital currencies challenge the idea that the only form of money is state-backed, with technology providing the backing instead of government guarantees.
Until now, Howgego adds, all forms of money have been about identity. He points to a coin found in a hoard of 5,000 Roman coins, which unearthed a previously unknown Roman emperor, Domitianus, from AD271. A soldier from northern Gaul, Domitianus proclaimed himself emperor, but did not last long. “Mining a coin was like seizing a television channel in a modern coup. He probably only survived a few days, but a coin was minted during that time.
Cryptocurrencies are different in that anonymity is part of the appeal. Edward VI’s coronation medal was to announce that the prince was now king, an example of what Howgego means when he says: ‘Coins are history in your hands’. This is not the case with cryptocurrencies. “The problem with bitcoin is the loss of identity.”
Sheila Warren of the Crypto Council for Innovation – an industry body – accepts that many of the new currencies will fail through a process of innovation and experimentation. She says cryptocurrencies are not just the preserve of wealthy investors, but are used for remittances where it is difficult to move money across borders and for people who want to access a system. financial strength without exorbitant cost.
Black people excluded from the traditional banking system, she says, can obtain loans through cryptocurrencies. “For the rich, crypto is about investing and speculating; for the poor, it is basic financial services.
Howgego says cryptocurrencies are an example of how money has evolved over time. His archive contains Roman treasures unearthed from an Oxfordshire field as it was being ploughed; an early example of Chinese paper money; a Noah’s Ark coin from Asia Minor; and what is thought to be an early example of coinage, from Lydia in what is now western Turkey, from around 600 BC. Silver from Roman imperial mints has been found as far east as Ukraine, India and along the Silk Road.
The Ashmolean’s coin collection, which numbers 300,000 items, is being digitized so that it can be accessed online, a painstaking process that museum researchers say will revolutionize research. Curator Jérôme Mairat says: “It’s not easy with 300,000 pieces. We have digitized 120,000 items over the past five years.
The only major gap in the collection is the period after the Romans left Britain in the fifth century AD, as from around AD 450 to 600 there is no evidence of coin use. “That’s why they’re called the Dark Ages,” Howgego explains. “We cannot say what was used as money.”