500 Réis (Discovery of India) – Portugal

By 1898, Portugal’s currency situation was defined by a prolonged period of financial instability and a deeply devalued currency, the real. The root cause was a severe public debt crisis, exacerbated by decades of fiscal mismanagement, costly colonial expeditions in Africa, and a default on external debt in the 1890s. This led to a dramatic loss of confidence, rampant inflation, and a significant fall in the external value of the real, which traded at a substantial discount against gold-backed currencies like the British pound sterling.

The government, under the regenerator Prime Minister José Luciano de Castro, was actively seeking a solution through a complex international loan agreement known as the Funding Loan. Finalized in 1898, this loan was brokered with a consortium of foreign banks and was designed to consolidate Portugal's scattered debts and restore metallic convertibility. The key condition, however, was placing Portugal's finances under effective foreign supervision, administered by a commission known as the Caixa de Conversão (Conversion Office), which would manage the gold reserves backing the currency.

Consequently, 1898 represents a pivotal transitional moment. The country was moving from a chaotic system of paper money and floating exchange rates toward the gold standard, a move intended to stabilize the currency and attract foreign investment. This shift came at a significant cost to national sovereignty, embedding foreign control over monetary policy and symbolizing the profound economic and political vulnerabilities of the Portuguese monarchy in its final decade.