2 Reales – Spain

In 1810, Spain was embroiled in the Peninsular War (1808-1814), a brutal conflict against Napoleon's occupying forces. This wartime crisis shattered the nation's financial system. The traditional royal treasury was bankrupt, and the French controlled key economic centers, including the capital Madrid and the mint at Segovia. To fund the war effort, the Spanish resistance government, the Supreme Central Junta, and its successor, the Council of Regency, resorted to desperate measures, primarily printing vast quantities of paper money without sufficient metallic backing.

This paper currency, known as vales reales (royal bonds), had first been issued decades earlier but now entered a period of catastrophic hyperinflation. As the government printed more to pay troops and suppliers, public confidence evaporated. The currency's value plummeted, leading to soaring prices, widespread hoarding of precious metal coins, and a effective return to barter in many regions. The situation was further complicated by a patchwork of monetary authorities; alongside the central junta's issues, some provincial juntas and even local authorities issued their own emergency paper, creating a chaotic and fragmented monetary landscape.

Consequently, Spain in 1810 operated with a deeply unstable dual system: a severely depreciated and distrusted paper currency for official and large transactions, and a scarce but coveted supply of silver and gold coins (reales and escudos) for everyday commerce and savings. This monetary collapse was not just an economic issue but a profound political crisis, eroding the legitimacy of the patriot government and exacerbating the suffering of the population, all while the war against the French occupation raged on.