The Currency That Was Not Accepted

In 1535, the first mint in the Americas was established in Mexico City. The 8-real silver coins struck here would eventually become a global currency.

Slightly later, the same mint struck copper coins: 4 and 2 maravedís. These were small-denomination coins for everyday small transactions.

They were not accepted.

The Record of Them Being Thrown into a Lake

The indigenous people disliked these copper coins. It is said that Friar Motolinia recorded that the disliked coins were thrown into a lake.

I write this with caution. This anecdote is a common theory based on chronicles, and the scale of the disposal is unknown. It has also not been confirmed to what extent the scene at the lake was a real event.

The Predecessor: Cacao

Why were they not accepted? Because there was already a form of small change in use.

Before the conquest, there was no minted coinage in this land. Nevertheless, the markets were highly sophisticated. What was counted were cacao beans. Cotton cloth, axe-shaped copper, and quills filled with gold dust also served as stores of value.

In the market, one turkey was one hundred cacao beans; one rabbit was thirty. People made purchases by counting beans. Deceitful individuals made counterfeits by filling cacao husks with mud. The fact that counterfeits were made is proof that cacao was accepted as currency.

Into this world came unfamiliar metal discs. Their value was guaranteed by the newly arrived conquerors. The beans were more certain.

What the Issuer Cannot Decide

Cacao continued to be used for daily small transactions. The minted silver, in large denominations, was directed outward, while local small change remained scarce. The land that minted the world's silver coins suffered from a lack of its own small change.

This incident demonstrates one of the limits of currency. The issuer can strike it and declare its value. It cannot force its acceptance.

It is the market that decides whether to accept it. The currency that failed here was defeated not by laws or minting technology, but by the beans that were already there.

However, a rejected currency does not always disappear. NOMISMA's materials also cover how paper money is less likely to be rejected as long as tax collection remains effective. The case of the copper coins is a case study of the opposite situation.