Silver 'Abbasi coin of the Safavid Dynasty

Minted in Baghdad, AD 1624–5

Shah 'Abbas I of Iran (1571–1629) dramatically increased the silk trade with Europe to rebuild the Iranian economy after it had nearly collapsed under the disastrous rule of his father. Gold and silver coins received from Europe were melted down and re-struck as Iranian coins, which were then used to buy goods from India.

In the seventeenth century Moghul India was a major trading partner of Iran. In exchange for textiles, sugar and indigo from India, Iran provided silk, fruits and horses. However, the value of commodities coming to Iran exceeded the export to India, leading to an imbalance of payments in India’s favour. As a result, Spanish pieces of eight, Venetian ducats and English crowns brought to Iran by European traders played a very significant role in the Safavid economy. Moreover, no gold and very little silver were mined in Iran in this period, so the only option was to acquire foreign silver and gold.

Silver was in short supply in Iran compared to Europe. After the Spanish conquest of South America large supplies of silver had been discovered. The most famous of these was Potosi, or silver mountain, discovered in the 1540s in South America. This silver was transported back to Europe where it would enrich the currencies there. Silver coins were then traded further east, through the Middle East, to South-east Asia and China in the world’s first global economy.