Barry Eichengreen: The end of the Dollar Empire is no longer unthinkable—think of Roman coins

Subscribe to enjoy similar stories.There is angst in the air about the US dollar’s once and future global role. For insight into the greenback’s prospects, pundits have looked to the British pound sterling, the dollar’s predecessor as the dominant international currency, and asked how economic stagnation, heavy debts and failed geopolitical adventures, like that in Suez in 1956, conspired to rob it of its global role.But informed observers can draw on a much longer history of international currencies—units used in cross-border transactions—stretching from the Dutch guilder of the 17th and 18th centuries back to the Florentine florin of the 14th and 15th centuries and the silver denarius of ancient Rome.In fact, it can be argued that the Roman denarius was the first true international currency.

Hoards have been found not only throughout the former territories of the Roman Empire but also along the Silk Road from India and Sri Lanka to China.The dates of these coin hoards coincide with the arrival in Europe of merchandise from these same parts of Asia, highlighting the importance of Rome’s trading prowess and commercial span in supporting its currency. The Romans had cargo ships of unprecedented size capable of long voyages.

No surprise, they took their native coins with them.Political unification of the Mediterranean Basin under Roman rule further encouraged commercial activity. This activity was regulated by Roman officials, backed by a formidable military and facilitated by the availability of a stable and uniform money.

To ensure quality, only the Roman authorities were permitted to mint silver and gold coins. Coinage was under the authority of the Senate, whose members received regular reports from the tresviri,