The currency of the United Kingdom, the oldest currency still in circulation in the world, is divided into pounds and pence, the monetary unit of the pound notes, which we on the European continent call “pounds sterling”. Coinage is called a penny (for a penny in the singular) and pence in the plural.
The name “sterling” comes from the first coins bearing a small star, or from the easterlin unit of measurement formerly used by goldsmiths, which became the coinage of ancient Rome, or in reference to the men and their fame of the Eastern “Easterlings”. For integrity in gold trading.
Until the mid-19th century, private banks in Britain and Ireland were free to issue their own banknotes. This paper currency was issued by a wide range of provincial and municipal banking companies in England, Wales, Scotland and Ireland.
There was a shortage of gold to issue coins, and the power to issue notes was gradually restricted by various Acts of Parliament, particularly the Bank Charter Act of 1844. This would eventually lead to the Central Bank of England's monopoly on banknotes. Under this, no new banks could print their own notes, and private banks with this right gradually disappeared through mergers and closures. The last English retail banknotes were issued in 1921 by Fox, Fowler & Company, a bank in Somerset County.
Many issuing banks in Scotland and Ireland
On the other hand, some provisions of this Bank of England monopoly apply only to England and Wales. The Scottish Notes Act was passed the following year, and three retail banks still retain the right to issue their own sterling notes in Scotland under the Banking Act 2009: the Bank of Scotland, the Royal Bank of Scotland and the Clydesdale Bank.
Following the partition of Ireland, the Irish Free State created the Irish pound in 1928, and this new currency was pegged to the pound sterling until 1979. The issue of Irish pound notes later came under the authority of the Monetary Commission of the Republic of Ireland. From 1928 it replaced notes of private banks. Four banks were able to issue notes in Northern Ireland: Bank of Ireland, First Trust Bank, Danske Bank and Ulster Bank.
While most of the world's countries control the circulation of banknotes directly or indirectly by a central bank, the United Kingdom has the distinction of fully authorizing seven retail banks to print their own banknotes.
Discussions are currently underway to legalize the Scottish pound in England and Wales. Whereas until now the acceptance of the Scottish pound has been at the discretion of English and Welsh merchants, this change in law will make it mandatory to accept the Scottish pound as a means of payment.
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