Chapter 727: The Currency Reform Plan

Representative money is essentially paper certificates backed by real gold and silver—equivalent notes redeemable for actual precious metals. People’s trust in them stems from their trust in the gold and silver behind them.

Credit currency, however, cannot be exchanged for gold or silver. Its value is decoupled from precious metals, and its purchasing power relies entirely on the state’s “promise.”

In this era, the biggest question is whether the state’s promise is strong enough to convince people that a mere stack of paper can replace real money—and whether international trading partners will accept that as well.

“Your Majesty, perhaps you don’t need to worry about that,” Padrick said, reading Gawain’s thoughts. “We have data and precedents. And in my view, if we want to issue credit currency, now might actually be the best time.”

Gawain looked at Padrick. “You mean…”

“You once taught us about the concept of national identity, so I understand your concerns. Frankly, the newborn empire doesn’t yet have enough prestige or influence to roll out a new currency detached from precious metals across the entire realm. Most of our people don’t even have a clear sense of nationhood, they lack sufficient trust in the Bureau of Governance, and they certainly don’t revere ‘imperial power.’ But… you do.”

Gawain paused, then couldn’t help but smile a little. “You’re saying my personal prestige as the founding emperor is enough…”

He didn’t finish the sentence.

Maybe… it really is.

Because those who had just shaken off the Ansu monarchy were still on their knees—though the Bureau of Governance had legally forced them to stand, their hearts remained bowed.

They might not understand what a “motherland” is, or grasp the concept of the Bureau of Governance, or comprehend state power—but deep down, they still unconditionally revered the “monarch,” and with that came unquestioning obedience.

This blind, backward reality had always been Gawain’s greatest obstacle to building a new order. But if he looked at it differently… it could actually be a source of leverage.

“Your Majesty, your prestige and influence are far greater than you realize—not just because you founded this empire and secured the oaths of all the nobles, becoming the sovereign of every Cecil citizen today, but also because of seven centuries of near-mythical propaganda about the first generation of pioneers,” Padrick continued. “To maintain their own status and reinforce the ‘legal legitimacy of noble bloodlines,’ every Ansu king and noble for seven hundred years has tirelessly glorified the original pioneers. This has had a profound impact on ordinary people. Among some of the more superstitious and ignorant, your resurrection is seen as a kind of ‘miracle.’ In this group, you wield a very special and irreplaceable influence.”

“Your Majesty, I know you’ve been working hard to change this ignorant and backward situation. You want to replace the old monarchic and feudal system with the Bureau of Governance and the concept of the state, transforming the people from blindly obedient ‘commoners’ into proud and dignified ‘citizens.’ But that’s not something that happens overnight. Since it can’t be done quickly, why not, before reaching that final goal, make some use of the current situation—without hindering progress?”

Gawain met Padrick’s intense gaze and, after a moment’s thought, said in a low voice, “There’s some truth to that—but we must still respect natural laws. Maybe my prestige and influence are strong enough to force the new currency’s adoption, but rolling it out nationwide still risks chaos. How do you plan to handle that?”

“Gradually,” Padrick answered immediately, clearly having thought this through long ago. “First, we promote it in three regions: the Southern Territory, the eastern part of the Holy Spirit Plains, and the Eastern Territory. Among these, the Southern Territory is the most stable and has undergone successful reforms. The people there recognize the Bureau of Governance, so introducing the new currency there should be no problem. The eastern Holy Spirit Plains are undergoing post-disaster reconstruction—essentially building a new order on ruins. There’s almost no old power to contend with, and all commercial activity there revolves around the United Reconstruction Corps, which is fully controlled by the Bureau. The various pioneer teams can use the new currency as the foundation to build a complete, brand-new economic structure. Lastly, the Eastern Territory… is the riskiest of the three because it still harbors a significant number of old nobles, and the old currency system remains stable. But no matter what, the Eastern Territory must be broken.”

Gawain nodded slightly. Though Padrick didn’t elaborate, he understood why:

With the Eastern Legion destroyed, the Loren family gone, and the pressure mounting on Changfeng Fortress, the Eastern Territory was effectively under full military administration by the Cecil Legion. Strong control and the complete submission of the old nobles made breaking the old order there easier than in the Northern or Western Territories.

Now was the best time to thoroughly reform the East, further dismantle the old nobles’ influence, and push the new currency.

Once the East was broken, it would become the best “model” for the North and West to follow, and the strongest “anchor” for further currency reform.

“After that, we’ll gradually implement currency reform in the Western and Northern Territories,” Padrick continued. “The people will have a buffer period, the nobles will have time to face reality, and with the three regions serving as examples, resistance to the reform will be minimized. Plus, with reference experience, the chances of chaos in those two regions will be greatly reduced.”

“While the empire reforms its currency, our commercial settlements with the Ogure tribal nation and the northern countries will still use gold and silver,” Padrick added. “Given the special nature of credit currency, our international partners will find it harder to accept the new money. So for a long time, we’ll maintain gold and silver settlements—possibly even long after credit currency is fully popularized in the empire. After that, we’ll use the empire’s powerful industrial strength and trade volume to gradually build the new currency’s credit…”

“You can put it more bluntly,” Gawain said, locking eyes with Padrick. “Make neighboring countries dependent on our industrial products, unify the entire settlement zone under the Cecil standard, make our alchemical potions, rune plates, and basic industrial facilities the foundation of society’s operation throughout the zone, and then start settling accounts with the new currency. During this process, we’ll maintain the strongest military power in the settlement zone to ensure everything stays ‘under control.’”

“If it were Typhon, they’d definitely seize half the continent’s wealth during this process—that’s their usual style,” Padrick sighed. “Trading paper for money—it’s madness.”

“But that also concentrates all the risks and redemption pressure on themselves, and turns every ‘fleeced’ country into an enemy. Once those ‘traps’ explode, every ounce of gold and silver they grabbed will become a ‘bomb’ like the Rebecca Crystals,” Gawain shook his head. “We want the whole world to grow strong, not to stand alone on a pile of ruins. We must always remember that.”

Padrick lowered his head solemnly. “Yes, Your Majesty.”

“Now, there’s another question,” Gawain exhaled deeply. “What will we use to peg the currency’s purchasing power?”

Representative money’s purchasing power comes from a fixed amount of gold or silver, which have intrinsic value, so it’s easy to measure. Credit currency, however, needs an artificially defined “anchor,” which is crucial.

Simply put, it means finding a relatively stable, indispensable, and widely used commodity in social activities, then having the state set how much of that commodity one basic unit of currency can buy.

At the initial stage of issuing credit currency, an anchor must be used to define its purchasing power.

“Grain,” Padrick said.

“Grain?” Gawain frowned slightly. “That’s not a very suitable anchor…”

“But we can’t find a better one,” Padrick replied. “I initially considered using ‘Ley Energy’ as the anchor, but magic is an omnipresent natural force. Some transcendent individuals can even gather magic by their own power. The Ley Network, as an energy concentrator, doesn’t qualify as an anchor. Various magical materials aren’t ‘essential goods’ either. In many regions, especially isolated ones, people might never come into contact with magical artifacts in their entire lives. But grain… in any era, any place, is always essential. Our job is simply to keep its price stable.”

“…In the end, it all comes down to grain,” Gawain murmured thoughtfully, almost to himself. “Let’s tentatively adopt this plan. You’ll handle the detailed statistics and calculations.”

“Yes, Your Majesty.”

After a deep breath, Gawain felt his racing mind finally begin to cool.

This special and crucial discussion was now preliminarily concluded. But as the starting point of currency reform, what he and Padrick had discussed was still just a rough framework. Refining and applying it would require more people and more time. Still, taking this first step successfully was a huge relief.

Relaxing a bit, his gaze returned to the desk, sweeping over the few “banknotes” lying there.

“How’s the anti-counterfeiting technology performing?” he asked casually.

“The special ink formula is working well,” Padrick bowed slightly. “Following Master Kamail’s advice, we mixed a trace amount of special crystal dust into the ink. Under strong sunlight or near a magical energy obelisk, the notes emit a specific shimmering effect. We also obtained Typhon’s banknotes, whose anti-counterfeiting methods are worth referencing—their notes are made from specially treated fabric with two magical threads woven in. These threads create specific shadow patterns under sunlight. We might combine both techniques when producing our currency.”

“No matter how advanced the anti-counterfeiting measures, some will always take risks,” Gawain nodded. “Besides strict laws and punishments, constantly updating the technology is important. We must ensure one thing: that the cost of most counterfeiting attempts far exceeds their potential gains.”

“As you say,” Padrick agreed. “In fact, a great mage could produce counterfeit notes that fool everyone, but our calculations show that most mages of that caliber would earn at least three times more energy working legitimately than they would spending that effort forging money. So sane transcendent individuals are unlikely to do such thankless work. And if they form teams to secretly buy equipment and materials for mass production, the risk of exposure rises sharply—also not worth it. Our current anti-counterfeiting strategy is based on this logic.”

Gawain hummed, then suddenly smiled. “One more thing… let’s make our banknotes as beautiful as possible.”

“Of course,” Padrick smiled back. “Beautiful currency itself is a display of technical prowess. Though they no longer represent real gold or silver… at least people will be happy to hold them.”

Padrick took his leave.

Gawain turned his head and glanced at Amber, standing just behind and to the side.

As expected, the half-elf lady (or at least she looked like one) was daydreaming, her eyes glazed over for who knows how long.

But the moment Gawain’s gaze landed on her, she snapped awake, blinking and staring at him. “Hey, you finally finished talking?”

Her ability to switch off her brain at will and then snap back to work instantly was truly remarkable.

Gawain wondered how she had trained herself to do that…

“Good grief, I’m starting to lose faith in how your minds work—especially yours,” Amber said, finally exhaling in relief once she was sure Patrick had really left. She planted her hands on her hips and launched into a loud rant. “I honestly had no idea there was so much going on behind these ‘banknotes’… That Patrick is something else. It’s rare to find someone who can have such a fiery, in-depth discussion with you on this kind of stuff.”

“Patrick really is exceptional—far beyond what I expected,” Gawain said with a half-smile, glancing at Amber. “I only gave him some basic concepts, and he managed to understand and apply them to this level. Not many people could pull that off. But the fact that you noticed there’s ‘so much going on’ means you understood more than you think.”

“I don’t get it!” Amber practically screamed, almost jumping up. “Don’t lie to me—”

“Relax, this part of the work isn’t really your responsibility,” Gawain said, shaking his head with a hint of helplessness. “I just wanted to say you’ve been very timely with gathering intelligence on the Gaoling Kingdom and the Silver Empire. Keep your focus there—because the Typhon people are watching the same direction.”

“Oh, leave that to me,” Amber said, patting her chest with a smug grin. “We can’t send intelligence agents that far yet, but gathering intel isn’t just about spies. As long as there’s communication between the north and south of the continent, information will come through.”

Listening to Amber’s confident reply, Gawain smiled softly and turned his gaze toward the window.

Outside, snowflakes drifted down from the leaden gray sky.

(End of chapter)