2 Ducats – Denmark

In 1662, Denmark was navigating a complex and precarious monetary situation, largely a legacy of the costly wars of the mid-17th century. The state treasury was severely depleted, and to finance its expenditures, the government had repeatedly debased the coinage. This meant reducing the silver content in coins like the mark and skilling while insisting they retain their face value, a practice that led to widespread inflation, a loss of public trust, and the hoarding of older, purer coins. The monetary system was chaotic, with a confusing array of old and new coins of varying intrinsic values circulating simultaneously, severely disrupting trade and the economy.

Recognizing the crisis, King Frederik III, who had established a hereditary and absolute monarchy in 1660-61, initiated a major currency reform in 1662 as part of consolidating his new centralized power. The state announced a recall and demonetization of the old, debased coins. These were to be handed in and reminted into new, stable currency with a fixed and guaranteed silver content. This was a bold attempt to reset the monetary system, restore royal credibility, and assert control over the economy—a key prerogative of the new absolutist state.

The immediate aftermath of the 1662 reform was harsh for the populace. The exchange rate set for the old coins was unfavourable, effectively functioning as a steep capital levy that wiped out a portion of people's savings and caused significant short-term hardship. While the reform ultimately succeeded in establishing a more stable and unified currency system, providing a foundation for future economic administration, it came at a direct cost to ordinary citizens. The episode underscored the power of the absolute monarchy to impose financial solutions, for better or worse, on the Danish kingdom.