It’s time to tackle this tricky topic I first talked about over in This Piece. If you haven’t read that one then it’s not the end of the world, but it is highly related. If you’re reading this piece because you want a better understanding of medieval economics then you’ll find that piece helpful too.
Anyway, toward the end of that write-up I mention having multiple currencies in a setting. Most complex settings will want to have multiple currencies for immersion’s sake. This piece will cover how to actually handle that.
I’m going to break this up a few ways. First we’re going to get the nitty-gritty economic theory out of the way, then we’re going to go through the nuts-and-bolts of how to actually exchange currencies in a medieval-esque setting, then we’re going to put it all into real DnD terms and examine a few different approaches.
What Good Is A Coin?
Let’s start with the basis of a given currency. In the last piece I used grain-backed currencies as a way of demonstrating various economic concepts since those concepts were more clear when the currency in question is inherently unstable.
Now let me make one thing clear: pretty much every currency ever has been backed by precious metals. This was usually gold, but has at times been silver or electrum (a gold/silver alloy). This concept even predates the ‘Gold Standard’ by millennia.
The reason for this is incredibly simple. When currencies are made of gold and backed by gold then a coin is worth its equivalent weight in gold. That might seem a bit ‘It’s worth what it’s worth’, but it actually makes handling currency conversion incredibly easy. Firstly, every single good in an economy is now ascribed a value relative to gold grammage, and that grammage is represented by coins. Following that we simply compare the relative grammage of coins, and also the relative value of goods within a currency.
Let’s say in currency A their standard coin is made up of 5 grams of gold and in Currency B the standard coin is 10 grams of gold. 2 coins in currency B are worth 1 coin in Currency A. Conversion is incredibly simple. In fact, you wouldn’t even necessarily need to change currencies since you’re really just trading on the raw value of the gold amount of the coin.
Add to that now the fact that in Economy A there’s a good (let’s say turnips) valued at 5 grams of gold per kilogram of turnips, whereas in Economy B turnips are valued at 3 grams of gold per kilogram. Now we have a discrepancy, and so we have a way for traders to accrue wealth. Anyone with the means to move that good from Economy B to Economy A will get a higher grammage of gold, which they can convert back into their home currency for a net profit. This isn’t super relevant to players, but it does give us an idea of how goods and money actually move through a world and the varying economies within it.
But there’s actually another layer to all this when it comes to currency conversion. Metals aren’t just worth what they’re worth inherently, they also derive value from exactly who and what is manufacturing the coins.
We Have To Talk About Rome
So much of our understanding of currency comes from ancient Rome. Even the word ‘Currency’ comes from Roman times and shares the same root as the word ‘Current’ because at the empire’s height coinage flowed from the mint through the empire like a river from a mountain lake.
Rome was (big oversimplification ahead) stable and wealthy. Their gold reserves were largely assured, the quality of the metals was very known, and the government wasn’t just going to up and vanish overnight.
Let’s say you have two empires, one big and stable and with lots of access to gold, and one that is highly unstable with dwindling gold reserves. Which coin will you trade in?
Well you’ll actually still trade in both, because the value of gold is the same across each empire. Coin B is worth two of Coin A because of their relative weights. But even if you’re using Empire B’s unstable currency you’re deriving its sense of value from Empire A’s stable coin. Coin B is worth its relative value compared to Coin A rather than its worth being derived from the strength of the economy it operates within (since that strength is non-existent).
But what if you have no stable empires around you? What if the currency is not backed by precious metals and is instead backed by a less stable good like grain? Well, now currency conversion gets interesting, because…
Currency Is Worth F***-All
It doesn’t matter if you still have 100 grams worth of gold in the form of coins, Empire A fell and Empire B also fell. That gold is functionally useless. People don’t care about the value-representing middleman of money anymore, they’re more interested in direct goods.
This is where we go back to what we covered in the last piece where a coin is now only worth what someone thinks they can use it for later. A coin will most likely be used to represent an intangible difference in value between goods being bartered. You and the other guy agree that the difference between 2 gallons of milk and 1 sack of grain is 1 gold coin, but that’s not necessarily fixing the price of gold as being relative to either milk or grain. It’s just a handy tool for the purposes of completing that transaction.
So how do we convert currencies in this kind of environment? Well now we get spicy, math-y conversion rates. But those rates aren’t actually fixed! There’s no stable central government to say ‘3 of our Shims are worth 2 of their Kraits’ and have a diplomatic agreement between the empires that fixes that rate. No, instead the conversion is based on that same principle of ‘What can I actually use this coin for?’. So from there we need to start asking ourselves ‘Who might actually want currencies from a different empire?’.
Let me tell ya, it’s not going to be the peasant-folk.
Traders, Borders, Moneylenders
The people who care the most about having multiple currencies are the people who are likely to end up in different parts of the world where different currencies are used. Again I touched on this briefly in the last piece. People who live in border towns are going to be more willing to accept payment in foreign currencies.
Let’s say you’re on your way from Empire A to Empire B. You stop in the first market town of Empire B and buy a bunch of stuff using your Empire A money. The merchants know that before long some people are going to come through town making the reverse journey and will be happy to receive payment in Coin A.
Better yet, those travelling folk might not even be selling goods in exchange for Currency A, they might just exchange it directly with the merchant (giving them Currency B for equivalent weight of Currency A).
But we’re also considering what happens when that equivalent weight is less important than the equivalent value. Well in that case the merchant can say ‘Yeah I’ll give you Currency A, but you need to give me extra of Currency B because that’s what I say Currency B is worth to me.’.
This is how you get merchants who specialise in exchanging currencies. I’ll go over this in greater detail in a separate piece on banking. The net effect here is when we get less stable currencies the relative rate is also set on a transaction-to-transaction basis, and moneylenders can take a substantial cut when converting currencies because they know that Currency A is far more valuable to their customer than Currency B (since the customer is en-route to Empire A where they’re going to need that currency badly). But to the moneylender both currencies are more or less the same. They can charge a premium in the currency being exchanged.
Oops I Backed My Currency With Grain
Now let’s look at a relativistic value between two economies. Economy A backs its currency with gold, Economy B does it with grain. Even though Economy B’s coins are still minted in gold, their value is often higher since grain is a more functional commodity. In fact, the more grain the empire has the more the money is worth (just like how a higher gold reserve makes for a more stable gold-backed currency, even if that currency isn’t inherently worth more than its weight in gold).
As a result, the grain economy will often find its coins are worth more than their weight in gold. What this means is in the border areas where both currencies might be used the currency of Economy B will be more popular since its purchasing power will be higher. Moneylenders will often make their money off extra percentages when converting currency rather than try and fleece the customer based on in-the-moment value.
But then you have a few bad harvests, the grain stores get low, and your currency tanks. Now a weird thing happens. As grain becomes more scarce its value goes up, but the value of the coin based off that grain goes down. So what happens?
Well, people within Economy B start trading in grain rather than coin, and people who trade between the two economies start trading in the coin of Economy A.
Good news though, Economy B, your coin is still worth its amount in gold weight outside of your borders. Inside them though your coin is worth less than its amount in gold.
Funnily enough a similar thing happened in the late Roman empire, where the value of the Roman coin was so debased that taxes would actually be collected ‘In Kind’, which is to say they were collected as goods with the equivalent value of the coin (or at least what the coin is supposed to be worth) rather than the coin itself. People would pay tax in grain or craft goods or what have you. This wasn’t because their currency was backed by grain, mind you, but this isn’t the time to go into the debasement of Roman currency.
My Setting Has Multiple Currencies, What Now?
Ok so firstly decide how each of these currencies is backed and decide what their relative value is. We can do something nice and easy and just say ‘Every currency is backed by gold, values are equivalent’. Now the character sheet does all the work for us. 1g on the character sheet just means ‘1 unit of gold’. We can simply handwave away whether that is 1 unit of Shims or one unit of Kraits. The party doesn’t have to worry about currency conversion, they just trade on the raw value of the gold they possess.
But if we want those different currencies to have meaning without getting too math-y in terms of relative conversion rates then all we need to do is include the requirement to exchange from one currency to another via a moneylender or bank. In the process, the lender takes a cut. Now the party, who know they’re travelling from Shim-land to Krait-land, will need to decide how many Kraits they’re going to need for the journey then give the moneylender that many Shims plus 10%. They want to buy 100g worth of Kraits? That’ll cost 110g of Shims.
If we really want to go hard on simulation we can introduce those more relativistic exchange rates. If you’re doing this then I recommend you take an easily divisible exchange rate (i.e. ‘2 Shims are worth 1 Krait’) and have the party represent this on their character sheet in gold terms. Instead of having to write down multiple currencies they just go ‘I’m changing all my money from Shims into Kraits’ and halve the amount of gold they have on their sheet. Alternatively, you can double the price of everything in Krait-land to represent this difference, and the party’s gold amount on their character sheets is representative of Shim value.
I would personally recommend using the middle one of these three examples, wherein currencies are equivalent in value but converting exacts a percentage fee. It adds meaning to the conversion of money without making it difficult and math-y to keep track of, and it also provides a convenient gold-sink if you know your players will be travelling across borders frequently.
Where’s A Bank When You Need One?
The one last thing you’ll need to determine is how accessible banking actually is to the party. If it’s accessible basically everywhere then we don’t need to separate out what currencies we possess on our character sheets. The party can just convert freely at the time of transaction (which in reality is them quickly visiting a moneylender, making an exchange, then spending the exchanged money at a shop). Alternatively, to simplify this even further when the party crosses a border you can just say ‘Convert all your money now, whatever gold you have written on your character sheet is whatever gold you have in Krait-land while you’re there’. This takes away the burden of the players going ‘How much do I want to convert’ and is representative of them being able to freely convert (since in reality you’re unlikely to actually convert all your money at the border).
If banking is less accessible though then the party will need to decide how much they’re converting in the instances where they have access to such services. This is how I do it, since it adds an extra resource for players to manage and that’s the sort of thing my players enjoy.
If that’s not your players’ jam then just use any one of the handwave-y methods. The beautiful thing about those methods is they don’t diminish the importance of the conversion since that percentage cut is still being taken.
Adventuring In Unstable-Land
There’s one critical thing I discussed at the end of the last piece. The other way to represent wealth is through physical goods with inelastic values. This is where representing money through things like precious gems, relics, works of art, etc comes into play.
Firstly, if you want to avoid the moneylender’s cut then your Emerald worth 500 gold is going to be worth 500g everywhere. In places where the economy has gone to shit and 1 gold of physical coin is actually worth less than 1 gold that Emerald is still going to be worth the same amount in terms of actual purchasing power. That is to say, if an Emerald could buy you a farmstead in empire A with its stable currency, it will also buy you a farmstead in empire B with its unstable currency.
So if we want to have adventures set in places where currencies have absolutely tanked and people barely trade in coins anymore, that ‘100g’ on everyone’s character sheet isn’t indicative of 100 actual gold, it’s indicative of 100 gold worth of stable goods (like a precious gem, or a good vintage bottle of wine, or a dragon’s tooth, etc).
Again it’s down to how detailed your players like things. Mine would love to write out what actual goods constitute that 100g’s-worth. Your players might, but they also might not, and if they don’t then they can just use the sheet as-is and write down ‘100g’.
That’s the beauty of DnD, we’re using simplified, highly representative tools to handle the simulation of our worlds. We can choose to add detail, we can choose to change what those tools are actually representative of, but at the end of the day we don’t ever have to change the tools themselves if we want to increase the detail of the simulation.
So that is, in broadest terms, how to simulate multiple currencies in your DnD campaigns. There are certainly other practical ways you can go about this, but this should at least give you a good baseline from which you can work out bespoke systems for your games and the economies of your settings.
And we’ve still got banking left to discuss! I’m really looking forward to that piece I have to say. If you liked this piece then consider supporting me on Patreon. I release Patreon-exclusive pieces from time to time, and the cost to back me is less than a cup of coffee a month.
Thanks for reading!