In the eleventh century a.d. the Byzantine Empire began debasing its gold coinage. For seven centuries Byzantium had maintained the purity of a gold coinage inherited from the reforms of the Roman emperor Constantine I.
Until the eleventh century, Byzantine gold coins show a gold content ranging between 22 and 24 carats fine, probably the highest standard of purity obtainable with the technical processes of the time. The Byzantine emperor Michael IV (r. 1034–1041) had practiced the money-changing profession before his elevation to emperor, and under his rule the Byzantine mints turned out coins varying between 12 and 24 carats. The purity of the gold coins continued to decline. Under Nicephorus III Botaneiates (r. 1078–1081), gold coinage averaged about 8 carats. By 1090 gold coins consisted of an alloy containing a bit of gold, more silver, and much more copper.
In 1092 Alexius I (r. 1081–1118) introduced a reformed coinage based upon four metals. A standard gold coin was struck with a fineness of 20.5 carats, a silver/gold alloy coin was struck with a fineness of 5 and 6 carats, a billon coin was struck containing 6 to 7 percent silver with the remainder of copper, and two copper coins were struck. This system provided the Byzantine Empire with a stable coinage throughout the twelfth century.
In 1204 Constantinople fell to Latin crusaders in the Fourth Crusade, and the gold coinage of Byzantium began a downward slide toward debasement. In 1253 William of Rubruck recorded an incident that occurred when the Tartars of Crimea were handed Byzantine gold coinage: “When our servants offered them ipperpera they rubbed them with their fingers and held them to their noses to sense by smell whether they were copper (utrum essent cuprum)” (Hendy, 1985). Apparently the Tartars were trying to detect a sour smell associated with copper, and the Byzantines debased their gold coinage with copper. It was said that India produced a copper that was bright, clean, corrosion resistant, and virtually indistinguishable from gold. Supposedly, Darius had drinking cups of gold and of copper, and these cups could not be distinguished except for smell.
In 1261 the Byzantine Empire was restored under a new dynasty, but the new government continued to strike debased gold coinage. In the fourteenth century debased gold coins ranged between 11 and 15 carats and a reformed silver coinage began to displace gold coins. The final blow to Byzantine gold coinage came when Constantinople fell to the Turks in 1453. Leonard of Chios, archbishop of Mitylene, gave the following account of monetary affairs during the siege:
But the troubled emperor did not know what he was to do; he consulted his chief men; They advised that the citizens should not be disturbed through the exigencies of the occasion, but that recourse should be had to ecclesiastical property. He therefore ordered the holy vessels of God to be taken from the sacred churches, just as we have read the Romans to have done on account of the needs of the moment, to be melted down and struck into coin (in pecuniam insigniri), and to be given to the soldiers, the ditch-diggers, and the builders, who were concerned with their own interest, not those of the public, and who refused to work unless paid.(Hendy, 1985)
Byzantium’s monetary disorder mirrored the deterioration of Byzantine society. Travelers and diplomats at the time noted the palaces, churches, and monasteries that were in ruins, and the destroyed houses and neglected fields.
The Byzantine shift from a gold coinage to a silver coinage marked a geographical shift in metallic coinage. Between the seventh century and the twelfth century, the Eastern world depended primarily on a gold-based coinage and the Western world depended on a silver-based coinage. During the thirteenth and fourteenth centuries a reversal occurred, and the Eastern world shifted to a silver-based coinage and the Western world to a gold-based coinage