40 Réis – Portugal

In 1641, Portugal's currency situation was precarious and deeply intertwined with its struggle for independence. Following the restoration of the Portuguese monarchy in 1640 after six decades of Iberian Union with Spain, the new king, João IV, inherited a kingdom in financial crisis. Decades of Spanish Habsburg rule had drained Portuguese resources to fund Spain's extensive European wars, while Dutch attacks had severely disrupted trade with Brazil and Asia, the twin pillars of the Portuguese economy. The treasury was empty, and the kingdom faced the immediate and enormous expense of fortifying its borders and building an army to defend against an inevitable Spanish invasion.

The monetary system itself was in disarray, characterized by a severe shortage of gold and silver coinage. Much of the precious metal from colonial trade had been siphoned off to Spain or lost to private hoarding. In its place, a proliferation of low-value copper real coins, known as moeda de baixo teor (low-grade coinage), flooded the market to facilitate everyday transactions. This over-issuance of copper money, combined with the scarcity of high-value silver and gold, led to significant inflation and a loss of public confidence in the currency. The state's urgent need to pay soldiers and fund the war effort only exacerbated this trend, forcing it to repeatedly debase the coinage.

Faced with this crisis, the fledgling Braganza dynasty took decisive action. In 1641, the government initiated a major monetary reform, announcing the recall and reminting of all circulating copper currency. The goal was to stabilize the monetary standard, restore confidence, and assert sovereign control over a key symbol of national authority. This reform was a bold but risky financial maneuver, as it temporarily disrupted commerce during a period of extreme vulnerability. Ultimately, it marked the first crucial step in disentangling Portugal's financial system from Spain's and establishing the fiscal independence necessary to survive the long War of Restoration.