1 Peseta – Spain

In 1881, Spain's currency situation was defined by its adherence to the Latin Monetary Union (LMU) in principle, though not in strict practice. The nation was on a bimetallic standard, legally valuing both gold and silver coins as legal tender at a fixed ratio. The primary unit was the peseta, introduced in 1868 to replace the old real and standardize the chaotic monetary system. However, the global phenomenon of "the disappearance of silver"—where the market value of silver bullion fell below its official mint price—posed a significant challenge. This led to the widespread hoarding and export of full-bodied gold coins, leaving a circulation increasingly dominated by silver and fractional currency.

The government, led by Prime Minister Práxedes Mateo Sagasta, attempted to address these instability issues. A key reform in 1881 aimed to solidify the gold standard by authorizing the minting of new 25-peseta gold coins (the "científico") and suspending the free coinage of silver for private individuals. This move was intended to curb inflation, attract gold back into reserves, and align Spain more closely with the gold-based systems of major trading partners like Britain and France. In practice, however, silver five-peseta coins remained unlimited legal tender, creating a "limping gold standard" where gold was the official benchmark but large quantities of undervalued silver still circulated at face value.

Consequently, Spain's monetary system in 1881 was in a transitional and somewhat contradictory state. While officially moving toward a gold standard for international credibility and stability, the economy still relied heavily on a bulky silver coinage whose intrinsic value was declining. This created persistent concerns about exchange rate volatility, speculative attacks on currency reserves, and the high cost of living. The situation reflected Spain's broader economic struggles to modernize and integrate fully into the European financial system during the Restauración period.