The Untold Story of the Dollar: Europe’s Gift to the U.S.

Gary Reed
3 hours ago
3 min read

We use the dollar every day—a global symbol of American economic power. Yet, its origin is neither in Washington nor in America, but much further away—in a forgotten European valley whose name traveled across centuries to become the name of the world’s most influential currency.

A Bohemian Valley at the Origin of the Word

The story begins in the 16th century, in a silver-rich region of northwestern Bohemia (today’s Czech Republic). In a small valley called Sankt‑Joachimsthal (“Valley of Saint Joachim”), miners exploited a major silver deposit. By 1520, this wealth led to an unexpected consequence: the minting of a new silver coin.

These coins were initially called joachimsthaler, after the place of production. Soon, European linguistic habits shortened the name to thaler, a word that became common across the continent for large, standardized silver coins.

Europe Embraces the Thaler

The thaler spread rapidly throughout Europe as a reference currency, thanks to its consistent size and silver content. It was adopted in various countries under different names—taler in German, daler in Dutch, tolar in Slovenian—reflecting the economic and commercial influence of these coins across the continent.

The “Dollar” in America Before the United States

Interestingly, European colonists in America did not use the thaler directly. Instead, the Spanish coin known as the Spanish dollar, or piece of eight (peso de ocho reales), circulated widely in the British colonies.

Produced in large quantities in mints across Latin America, this Spanish coin became the most common currency in transatlantic trade from the 17th to the 18th century. Because it resembled the European thaler, English speakers naturally called it a dollar, applying the European term to the Spanish coin they actually used.

Photo by DΛVΞ GΛRCIΛ: https://www.pexels.com/photo/us-dollar-banknotes-stack-and-pile-background-32553545/

An Official American Currency

After independence, the Coinage Act of 1792 officially established the unit of currency in the United States under the name “dollar.”

The choice was practical: the term dollar was already familiar and widely used in colonial commerce. The unit was defined in terms of precise metal content—silver or gold—long before the era of paper money, which gradually appeared in the 19th century.

The Origin of the “$” Symbol

Few monetary symbols are as universally recognized as “$”, yet its precise origin is debated.

The most widely accepted theory traces it to the Spanish peso. Merchants abbreviated pesos as “ps”, and the superimposition of the “p” and the “s” gradually formed the modern $ symbol.
Another hypothesis links it to the Pillars of Hercules on Spanish coins, but this is less supported.
A third, more mythical theory suggests it evolved from the letters U and S (United States), but the symbol existed before 1776.

Photo by crazy motions: https://www.pexels.com/photo/a-document-and-coins-12920745/

In any case, the $ sign first appeared in commercial documents at the end of the 18th century and gradually became associated with the American dollar. Today, it is used worldwide as both official currency and a symbol of modern economy.

Photo by cottonbro studio: https://www.pexels.com/photo/grayscale-photo-of-woman-wearing-a-sun-visor-cap-5922483/

A European Name for a Global Currency

The word dollar and its symbol perfectly illustrate the transnational history of money. A 16th-century Bohemian coin, a colonial Spanish currency, and the influence of early American colonists converge to form one of the pillars of the global financial system: the American currency, symbol of U.S. economic and cultural power.