The British pound began as an actual pound of silver
King Offa of Mercia, who reigned in the eighth century, took a Tower pound of silver, about 350 grams, and divided it into 240 coins called sterlings. Two hundred and forty of them made a pound of sterlings. In practice the coins varied and seldom added up to a full pound, yet the name has outlived every rival currency.
Sterling is the oldest currency still in continuous use, and in 2025 it ranked fourth in foreign exchange trading behind the dollar, euro and yen. For most of its life no pound coin existed; the pound and shilling were just units for keeping accounts. The system of 20 shillings to the pound and 12 pence to the shilling came from Charlemagne's Frankish money, which is why the old abbreviations were Latin. The pound was L, for libra, the Roman pound weight; the shilling was s, for solidus; and the penny was d, for denarius.
Where the word sterling comes from is disputed. The Oxford English Dictionary favours an Old English word meaning coin with a star, since some Norman pennies bore a pair of stars. The numismatist Philip Grierson objects that starred pennies were minted only from 1077 to 1080 and were a tiny share of the coinage. He proposes a root meaning stout or strong, noting that the Roman solidus carried a similar sense and also replaced a lighter coin. An old idea linking the name to Hanseatic traders called Easterlings does not hold up.
The coins were remarkably stable. In 1158 Henry II introduced a penny of 92.5 percent silver, the alloy now called sterling silver, which wore down more slowly than purer metal. While Europe's coinages were steadily debased, the English penny barely changed from 800 onwards. Trouble arrived under Edward III, when Flemish gold paid for English wool unsettled the currency, and a poorly judged gold-to-silver ratio drained England of silver coin until new gold nobles were struck in 1351.
Everyday life added its own vocabulary. A sixpence was a tanner and a shilling a bob, and quid, of unknown origin, survives as slang for the pound. Traders still call the pound-dollar rate cable, because from the mid-nineteenth century it was sent across the Atlantic by telegraph cable. Decimal Day in 1971 finally split the pound into 100 pence.
Source: Pound sterling
