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On 28 October 1489 Henry VII instructed the officers of the Mint in the Tower to strike a new gold coin.
The pound sterling had been a unit of account for centuries but this new gold coin, given a face value of 20 shillings, was effectively the first pound coin. It was spectacular – the largest gold coin yet issued in England and arguably the most beautiful. Bearing elaborate yet commanding designs and named a sovereign, it was deliberately intended as a statement of the power and dignity of the new Tudor dynasty and was duly struck in turn by each of the Tudor monarchs.
When James I came to the throne, however, the coinage was to reflect his pride in uniting the crowns of Scotland and England and the sovereign was renamed the unite. In the eighteenth century the key gold coin was the famous guinea, a coin whose value rose and fell with the price of gold until finally stabilising at 21 shillings. Gold coins largely gave way to notes during the Napoleonic Wars but following the great reform of the coinage in 1816–17 after Waterloo gold was adopted as the 'sole Standard Measure of Value'.
It was originally intended in 1817 to re–introduce the guinea but it was found that ‘a very general wish prevails among the Public in favour of a Coinage of Gold Pieces of the value of Twenty Shillings and Ten Shillings, in preference to Guineas, Half Guineas and Seven-Shilling Pieces’.
Hence a new gold coin was born and given the old name of sovereign. Smaller and thicker than its Tudor predecessor, but still 20 shillings in value, the revived sovereign came to be regarded as the ‘chief coin of the world’ and remained in everyday use until the First World War.
Once again £1 coins were replaced by banknotes, but by 1980 it had become apparent that, due to the increases in prices and the relatively short life–span of a £1 note in circulation, the £1 unit of currency was more appropriate as a coin.
The new £1 coin made its appearance in 1983 and, on its reverse, bore an intricate depiction of the Royal Arms. Since that time there have been a total of 13 different reverse designs on the £1 coin representing the constituent parts of the United Kingdom.