̽��ֱ�� of Cambridge - currency

Pop-up mints and coins made from prayers

amb206 — Mon, 04 Dec 2017 09:38:48 +0000

We’re used to the kind of circular coins that jangle in your pocket. But this one is lozenge-shaped and features a crude impression of a castle on its face. Its edges are sharp.

A silver shilling piece, it was made in 1648 during the bloody siege of Pontefract Castle. Today it’s one of 80 examples of currency on display at the Fitzwilliam Museum. ̽��ֱ��temporary exhibition – Currencies of Conflict – is thought to be the first dedicated exclusively to emergency money.

̽��ֱ��focus is on coinage that reflects the turmoil of the English Civil War. But the exhibition also sets these coins within a wider context of 2,500 years of history and features some rarely shown items from the Fitzwilliam’s outstanding collection.

Between 1644 and 1649, the Royalist stronghold of Pontefract Castle was besieged three times by the Parliamentary forces led by Oliver Cromwell. Royalists loyal to King Charles 1 also held out at Carlisle, Newark and Scarborough Castles. All eventually fell to the Parliamentarians.

Examples of siege coinage from all four castles appear in the display. These coins were made by craftsmen working within the fortress walls, using metal obtained from melting down objects requisitioned from the occupants of the castle and town.

People, and especially soldiers, had to be paid to ensure their continued loyalty. “We don’t know how many emergency coins were made during these sieges but a contemporary journal entry from Carlisle suggests that £323 of shilling pieces were struck from requisitioned plate. They show how a micro-economy developed during times of siege,” said curator Richard Kelleher.

Although the quality and weight of the silver, and (rarely) gold, was generally good, the manufacture was often much less sophisticated. In temporary mints, pieces of metal were stamped with ‘dies’ of varied workmanship, from the crude designs at Carlisle to the accomplished work of the Newark engraver.

“In the emergency conditions of a siege, coins were sometimes diamond-shaped or hexagonal as these shapes were easier to cut to specific weights than conventionally minted coins which required the specialist machinery of the mint,” said Kelleher.

In the medieval period, numerous mints operated across England but by 1558 there was only one royal mint and it was in the Tower of London. During the Civil War, Charles I moved his court to Oxford, establishing a mint in the city. A stunning gold ‘triple unite’ (a coin worth £3 – one of the largest value coins ever minted) is an example of the fine workmanship of the Oxford mint.

On its face it shows a finely executed bust of the king holding a sword and olive branch, while the reverse carries the Oxford Declaration: " ̽��ֱ��Protestant religion, the laws of England, and the liberty of Parliament." Another rare coin from Oxford is a silver pound coin weighing more than 120g showing the king riding a horse over the arms of his defeated enemies.

Also displayed is a silver medal, made during the short Protectorate headed by Oliver Cromwell. It commemorates the Battle of Dunbar of 1650 when Cromwell’s forces defeated an army loyal to Charles II. Its face shows the bust of Cromwell with battle scenes in the background, while the reverse shows the interior view of Parliament with the speaker sitting in the centre.

̽��ֱ��earliest piece in the exhibition is an electrum coin dating from the 6th century BC. It originates from the kingdom of Lydia (western Turkey) and depicts a lion and a bull in combat. ̽��ֱ��earliest reference to coinage in the literature records a payment in coin by the Lydian king for a military purpose.

A Hungarian medal, commemorating the recapture of Budapest, provides a snapshot of a famous siege in progress. ̽��ֱ��walls are surrounded by cavalry and infantry complete with the machinery of siege warfare – artillery pieces – which have breached the walls.

This medal was also used as a vehicle for propaganda. ̽��ֱ��reverse carries the image of the Imperial eagle (representing the Habsburg Empire) defending its nest from an attacking dragon which represents the threat of the Ottoman Empire.

Much less elaborate are examples of coins made in circumstances when precious metals were in short supply. A 16th-century Dutch token is made from compressed prayer books and a piece from occupied Ghent in the First World War is made of card.

Extremely vulnerable to damp, these coins’ survival is little short of miraculous. During the siege of Leiden the mayor requisitioned all metal, including coins, for the manufacture of weapons and ammunition. In return, citizens were given token coins made from hymnals, prayer books and bibles.

Bringing the narrative of currency and conflict into the 20th century are paper currencies of the Second World War. Britain and its American allies issued currency for liberated areas of Italy and France, and for occupied Germany.

̽��ֱ��temporary exhibition Currencies of Conflict: siege and emergency money from antiquity to WWII continues at the Fitzwilliam Museum until 23 February 2018. Admission is free.

Inset images: England, Charles 1 (1625-49) silver shilling siege piece, 1645, Carlisle; England, Charles 1 (1625-49) gold triple unite, 1643, struck at Oxford; Commonwealth (1649-60), silver medal of 1650 commemorating the Battle of Dunbar; Lydia, Croesus (561-546 BC), Gold stater. Foreparts of bull and lion facing each other; Leopold I (1658-1705) silver medal, 'Budapest defended 1686' by GF Nurnberger; Netherlands, Leiden, paper siege of 5 stuivers, 1574; Germany, Allied Military Currency, 1 mark, 1944.

In the tumultuous upheaval of the English Civil War, Royalist castles under siege used ‘pop-up’ mints to make coins to pay their soldiers. A unique display at the Fitzwilliam Museum tells the centuries-old story of emergency currency made from gold, silver and compressed prayer books.

Emergency coins show how a micro-economy developed during times of siege.

Richard Kelleher

Fitzwilliam Museum

England, Charles I (1625-49) lozenge-shaped silver shilling siege piece, 1648, Pontefract

̽��ֱ��text in this work is licensed under a Creative Commons Attribution 4.0 International License. For image use please see separate credits above.

Yes

Could cryptocurrency help the ‘bottom billion’?

lw355 — Mon, 17 Oct 2016 12:02:53 +0000

‘Cryptocurrency’ is a form of finance that exists only online. Unlike national currencies like the British pound, it isn’t forged as coins or printed as notes and no central authority governs it.

Most often it’s associated with an eclectic mix of individuals: gamers, hackers and the tech-savvy; anti-authority libertarians who believe in a global currency; gamblers happy to speculate on ‘digital gold’; shady dealers, money launderers, users of adult content services and the dark web; forward-thinking members of the financial sector.

But it has also been looked at as one possible solution to help a very different demographic – the world’s poorest poor, the so-called bottom billion. Many in this demographic lack bank accounts, have difficulty in proving they own their own land or business, and frequently depend on sending or receiving money across borders to poorer relatives.

In fact only one in five adults living on less than $2 per day has a bank account, and nearly 80% of poor adults, or two billion people, are excluded from the formal financial system. Meanwhile, the World Bank estimates that 75% of the $581.6 billion global remittances in 2015 were sent to developing countries.

But how can cryptocurrencies help? Since its launch in 2009, bitcoin, the most well known of digital currencies, has had a chequered history. Issues with market volatility, security and regulation, together with its association with online black markets like the now defunct Silk Road, have created suspicion among citizens and policymakers alike.

And yet, a recent headline in Wired stated: “Thought bitcoin was dead? 2016 is the year it goes big”; the reason, they explained, is it can “provide a much cheaper and simpler way of moving money from place to place, particularly when you’re a consumer or business moving it across international borders or a retailer accepting payments from online buyers.”

Dr Garrick Hileman, who researches the impact of cryptocurrency on world finance at the Cambridge Centre for Alternative Finance, adds: “And it’s not just transfer fees. Conventional financial systems can suffer from slow transfer times, inconvenient hours for completion of transfers, limited access to transfers, and the failure of approximately 2% of all international transfers to be successfully completed. These all negatively impact remittances.”

He and colleagues have been looking at which markets and countries are the most likely to adopt cryptocurrencies based on 40 different factors, ranging from degree of technology penetration to cross-border transactions fees to history of financial crises and inflation. ̽��ֱ��results indicate that Sub-Saharan Africa, Latin America and former-Soviet Union countries have the greatest potential for adopting cryptocurrency.

“Cryptocurrency is an immature technology and is not without flaws. However, as with any new technology, it’s the applications that have ignited interest – it’s raised important questions about how cross-border payments can be improved and, wider still, whether the very special type of ledger system that underpins cryptocurrency can be used for any number of other areas.”

At the heart of bitcoin is the ‘blockchain’, a database that records all transactions chronologically through a unique series of numbers arranged in ‘blocks’, which are then ‘chained’ to the next block cryptographically, so as to be both secure and accurate. This linking of information makes them like a financial ledger, but unlike centralised banking systems, the blockchain is a database that can be stored and shared worldwide by anyone with a computing device and internet connection – hence its description as a distributed ledger technology (DLT).

Part of the promise of cryptocurrency lies in the absence of a gatekeeper in its set-up, as Hileman explains: “Transactions occur person to person, or machine to machine, without the need for third party institutions – and that means lower or no transaction fees.”

“For the seven years bitcoin has been operating, there hasn’t been a single minute of downtime, unlike traditional IT networks employed by banks and other institutions. This resiliency has people’s attention,” says Hileman. “And currency is not the only thing that DLT can be used for. It can be used to exchange anything that has value – stocks, houses, airline miles, notarisations, votes.”

This year, the Government Office of Science published a report in which Chief Scientific Advisor Professor Sir Mark Walport described distributed ledgers as “powerful, disruptive innovations that could transform the delivery of public and private services” and “provide new ways of assuring ownership and provenance for goods and intellectual property.”

One of the recommendations was for the UK research community to ensure that distributed ledgers are scalable and secure. ̽��ֱ��report added that the Alan Turing Institute – a joint venture by the universities of Cambridge, Edinburgh, Oxford, ̽��ֱ�� College London, Warwick and the Engineering and Physical Sciences Research Council – would help to support these endeavours.

“We probably have yet to see the full extent of future uses of distributed ledgers,” adds Hileman. “However, our research has shown that cross-border transactions are viewed as one of the most promising applications of distributed ledger tech, due to the high transaction fees, technical interoperability issues, complex and conflicting regulatory frameworks, and legacy equipment and processes associated with existing systems.”

To realise this potential, he says, there are problems that need to be solved for customers in developing countries: “people know they are being stung by transaction fees but are still reluctant to switch for a wide range of reasons.”

“It could even be that banks themselves adopt the technology, and yet still enable its distributed peer-to-peer set-up, offering it as a separate service to their traditional monetary services. In other words, customers may never know their transactions are happening on a blockchain,” he adds.

Bitcoin has had a volatile exchange rate and Hileman concedes that it’s too early to know whether regulatory measures will help shield customers from this and other risks, or reduce money laundering and financial crimes committed with bitcoin. In the meantime, the Centre’s work on benchmarking cryptocurrency and blockchain activity will provide useful data for policymakers and other stakeholders keeping an eye on the technology.

“More than $430 billion was sent in remittances to developing countries in 2015, mostly to India, but also China, Mexico and Nigeria,” says Hileman. “ ̽��ֱ��costs of these transactions – which can average as high as 12% in Sub-Saharan Africa – hit the poor the hardest. Technological advances like cryptocurrency and distributed ledgers may offer a solution.

“It would be surprising to me if in 30 years from now we aren’t looking back and saying yes this was a watershed moment for financial inclusion, and that cryptocurrency and distributed ledgers played a significant role in opening up access to the financial system in developing economies.”

Many of the world’s poorest poor don’t have access to a bank account and yet depend on being able to transfer money across borders. Could digital currency help, ask researchers at the Cambridge Centre for Alternative Finance.

More than $430 billion was sent in remittances to developing countries in 2015, mostly to India, but also China, Mexico and Nigeria. ̽��ֱ��costs of these transactions hit the poor the hardest

Garrick Hileman

FamZoo Staff

From cash to digital

̽��ֱ��text in this work is licensed under a Creative Commons Attribution 4.0 International License. For image use please see separate credits above.

Yes

Licence type:

Attribution-ShareAlike