The King's Imprimatur also appears on money in a Feudal or Monarchal system. This certifies that the money is not counterfeit, is official and legal tender, made with the proper amount of gold (or other precious metal). Such assurances, however, can be a slippery slope if the government is dishonest, greedy, or unstable. With a simple decree, most monarchs can change the metal content of their coins.
Another money making scheme for governments is to periodically change the design of coins and declare the old design no longer legal tender - users are then obliged to exchange their coin for a fee (either direct to the mint or from a money changer who is farming the business) which serves as a de-facto tax. This has the marginal benefit to the economy of keeping the specii in good shape and clearing out worn and clipped coins. If the government is able to refrain from debasing the currency this can actually be relatively positive for the local economy.
Where imprimatur exists, there will generally be controls on the holding and spending of foreign (and obsolete local) currency - these may amount to an absolute prohibition, with all incoming currency being obliged to be exchanged for local money (usually for a fee), or the government may tolerate a grey-market in "alternative currency" but demand the payment of taxes court fees and similar things in approved coin (and possibly forcing some or all licenced businesses such as guilds to do the same), thus tending to drive out other coinage.
Historically, economies tend to follow this general pattern:
- Start with Barter.
- The rarer or more valuable items become Commodity Money.
- Become formalized with Grain-based Local Currency.
- The Royalty or other governing body forms a National Currency of Representative Money, often based on the Gold Standard.
- The King declares that local currencies are invalid, and the power transfers from communities to the central government.
- The coins are struck with the King's Imprimatur, and over some period of time their value lies not in the metal they are made of but in the government's promise. This money is valuable because the King says it is! It becomes Fiat Money.
- This leads eventually to something akin to the Federal Reserve System, where the lines between the bank and government blur a bit.
- The power transfers from the Royalty to the Bank - the bankers own the nation, and the money is based on debt.
Game and Story Use
- The transition times, when power shifts from the communities to the government, or from the government to the banks, can be times of great strife and tumult.
- Royal Decrees and other things bearing the King's Imprimatur (say, the papers granting a Monopoly by Royal Decree) might serve as a MacGuffin, Treasure, or Reward.
- A plot pinched from Tim Severin's Viking trilogy: A corrupt coiner is manufacturing coins under a royal minting licence for a government known for its strict controls over the quality of its bullion coins and whose specii is thus accepted internationally (specifically the court of Knut the Great). He cannot debase the current issue as his produce is subject to audit and assay and the penalties for forgery are severe … however he can (and does) forge the previous issue, debasing it heavily. These counterfit coins are then artificially aged and either dumped into foreign markets (that still regard them as valuable based on the mint's reputation for strict currency control) or laundered back into the domestic economy in exchange for the new issue of coins where it is difficult to distinguish them from genuine coins of the previous issue, which typically keep coming in for years following a re-coining.