When people mention private money, they usually think of private banknotes. I’ve also pointed out time and again that most money today is private money, in the form of bank deposits.

But there’s also the curious case of private coinage in the 1700s & 1800s UK.
At the time, coinage was minted by bringing the metal (gold, silver, or copper in the case of the British Royal Mint) to the mint and paying a striking fee.
This of course meant you lost a little money to mint money (not unlike many stablecoins). You also had to physically transport your guineas, shillings, pennies, farthings, etc, so coinage tended to be less plentiful as you grew further away from London.
As you might imagine, small change was rarely minted. As the reliance upon wage labor grew during the Industrial Revolution, this became a recurring crisis.
Bank notes could fill in once you hit £1, but it was generally illegal to issue notes in smaller denominations. In any case, it likely would have been impractical for things like pennies and halfpence.
So employers were always scrambling for copper coinage to pay daily or weekly wages. Some would even pay people in shifts so they could go to the shopkeepers and publicans in town, buy the small denomination coins back with banknotes, and repeat. One factory owner notably paid his workers at three different times of day, so they could shop for essentials and buy back the copper coins.
It was so bad that sometimes multiple workers would be given a £1 note to share, and they’d have to go to the pub until the publican could make change 🍻
The solution (other than counterfeits) came from the Parys Copper Mine in Wales, where the mine operator began striking his own copper pennies to pay his hundreds of workers.
The pennies, known as Druids, bore a promise to pay one silver penny on redemption at the mine or its redemption agents in Liverpool and London.
They quickly began circulating as people preferred them over the counterfeits and *extremely* old and worn royal pennies.
It wasn’t long before this became a booming business, despite being in a legal gray area like stablecoins today.
They weren’t counterfeits, just token coins with a redemption pledge. There was also the fact that the Royal Mint was uninterested in minting copper coinage when the money it made was primarily on gold coins.
Nonetheless, seven years’ “transportation” to Botany Bay isn’t a small penalty if your private coins were seen as counterfeit.
Eventually the use of private coinage petered out as Parliament forced the Royal Mint to (at least in theory) take over issuing small denomination coins again.
This was in part driven by embarrassment at the sorry state of circulating coinage, which began to be accepted at a discount to private coins, despite being legal tender.
It was also in part due to the issuance of private silver coins making the Royal Mint grumble less about supplying copper coins as its precious metals business became threatened.
Below you can see one of the early high-quality Druid tokens.