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Using letters of credit in a fantasy setting rather than coins

Two Hours to Doom

Validated User
I’d like to have something a bit different for my fantasy setting/system regarding currency.

For adventurers, especially those returning from a successful expedition, they would be laden with treasure and coin. They’d be vulnerable to theft and would want to get this to an auction house as soon as possible. After selling over their valuables, they’d be given a letter of credit of some sort.

Perhaps letters of credit/traveler’s cheques/circular notes is a way to go. But I’m also not very familiar with how it works and implementing it into the setting.

Letter of Credit:

Circular letters of credit were usually issued by a bank, which enabled that person (usually an individual of means) to draw funds from correspondent banks while traveling. This was considered safer than carrying large sums of cash or coins. Such letters were often issued on special paper with formal lettering and designs to discourage counterfeiting. A letter of credit consisted of three separate items. The first item states the amount of funds that can be drawn (recorded on the back of the letter was the drawing of funds and the current balance. The second item was a list of correspondent banks. And the third was a signature card which was presented for comparison when drawing funds (it also contained additional information such as a description of the letter bearer intended to add a level of security). Travelers were advised to keep the letter and signature card separate from one another as a precaution against theft. Banks typically charged around 1% of the value of the letter for its issuance. Circular letters of credit were in many ways similar to circular notes which were in turn a precursor to later traveler's cheques.

Circular Note:

A circular note is a document request by a bank to its foreign correspondents to pay a specified sum of money a person. The individual’s circular note is issued with a signature card letter and must be produced on presentation of the note. Circular notes are generally issued against a payment of cash to the amount of the notes, but the notes need not necessarily be cashed, but may be returned to the banker in exchange for the amount for which they were originally issued It is the duty of the payer to see that payment is made to the proper person and that the signature is valid; he cannot recover the amount of a forged note from the banker who issued the note.

Traveler’s Cheque:

A traveler’s cheque is used in place of hard currency. Denominated in a currency and preprinted, these fixed-amount cheques allow the person signing it to use it instead of cash at accepting businesses. The incentive for merchants and other parties is that as long as the original signature and the signature made at the time the cheque is used are the same, the cheque's issuer will unconditionally guarantee payment of the face amount even if the cheque was fraudulently issued, stolen, or lost. This means that a traveler's cheque can never 'bounce' unless the issuer goes bankrupt and out of business. If a traveler's cheque were lost or stolen, it can be replaced by the issuing financial institution. Banks issuing traveler's cheques earn income from fees and interest for the period that the cheques are uncashed, while not paying any interest to the cheque holder, making them effectively interest-free loans.

For game purposes, the goal is to keep it simple. I want to condense the three types down to a single document. So you’ve got two forms of currency: cheques and coins. Cheques handle the large purchases, while coins (say pennies) handle small expenses like a meal or drink at the bar.

One side of your character sheet essentially acts as your signature card (identity, stats, and whatnot) and the other is the letter of credit.

If there is any fantasy /post-apocalyptic game that does something like this, maybe I can draw from that as well.

I’m open to suggestions!


Not Woke until I’ve had my Coffee
RPGnet Member
Validated User
You would need to consider the format in relation to whatever forgery/validation technology and/or magic exists in the setting. I believe Eberron had a banking system of sorts, enabled in part by magical sigils that couldn't be copied.

committed hero

nude lamia mech
Validated User
Depending on the presence & power of deities in the setting, a god of finance would be pretty important!

Some other things this framework might need are
-a high degree of confidence that the deposited gold is safe, or the value can be returned to the owners if it gets lost. I immediately thought of a pyramid scheme involving an illusionary hoard and/or dragon).
-some way the ownership can be magically established and transferred if they're not simply bearer instruments, when the notes themselves become currency, which is inevitable. Maybe even a central registry kept up to date with divinatory magic.


Registered User
Validated User
You might extend the idea of letters of credit to merchant houses and guilds. They probably have the resources to store valuables and the reach to provide payment across different regions. A note from a merchant house might have worth across national borders that a noble's note wouldn't, for example.

Of course, there's always the chance a bank failure turns notes into useless paper. I remember watching a western where a character was paid in bank notes. By the time they reached their destination, the issuing bank had failed and their pay was valueless.


Registered User
Validated User
Merchants in the 17th through 19th centuries developed all manner of sophisticated exchange practices.

One of the most convenient and adaptable was the idea of a bill of exchange. This took many forms, from a promissory note (IOU) to a cheque (to give two examples that are still in everyday use). The basic idea is that if A holds money on account for B (a deposit, a debt that A owes B and has yet to repay, and so on—and it need not be a bank, but could be another merchant or anyone really), B can write a note authorizing someone else (a named person C, or "the holder") to collect. The great thing about bills of exchange is that they are "negotiable," meaning the holder can sign it over to another person (again, a named person D, or "the holder"), ad infinitum.

In the real world, the holder's signature is usually enough to negotiate the bill. In a fantasy world, you might want extra verification measures to prevent forgeries, coercion (magical or otherwise), etc.
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Not Woke until I’ve had my Coffee
RPGnet Member
Validated User
Given part of what I'm doing at work today, you could have "Bloodchain", where small blood sacrifices are used to summon minor demons who maintain contract/account ledgers.


Does the math.
Validated User
Checks are an ancient idea.

The ancient Romans are believed to have used an early form of cheque known as praescriptiones in the 1st century BCE.[7]

Muslim traders are known to have used the cheque or ṣakk system since the time of Harun al-Rashid (9th century) of the Abbasid Caliphate.[8] Transporting a paper sakk was more secure than transporting money. In the 9th century, a merchant in country A could cash a saqq drawn on his bank in country B.[9]

In the 13th century in Venice the bill of exchange was developed as a legal device to allow international trade without the need to carry large amounts of gold and silver. Their use subsequently spread to other European countries.

In ancient India there are evidences of loans from the Vedic period (beginning 1750 BC). Later during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person, which corresponds to the definition of a bill of exchange as we understand it today.
The speeches of Demosthenes contain numerous references to the issuing of credit (Millett p. 5). Xenophon is credited to have made the first suggestion of the creation of an organisation known in the modern definition as a joint-stock bank in On Revenues written circa 353 B.C.

The hawala system has existed since the 8th century between Arabic and Muslim traders ... In the most basic variant of the hawala system, money is transferred via a network of hawala brokers, or hawaladars. It is the transfer of money without actually moving it. In fact, a successful definition of the hawala system that is used is "money transfer without money movement"... Along with the money, he usually specifies something like a password that will lead to the money being paid out ... The unique feature of the system is that no promissory instruments are exchanged between the hawala brokers; the transaction takes place entirely on the honour system.

Which describes various Indian instruments, like checks to a person, or bearer instruments

Fundamentally all you need is a document describing the money, some surety that the document is from whom it claims, and some surety that the presenter is the person who should be paid (unless it's a bearer instrument like cash). You could just say "checks happen" unless you want to base stories around fraud and fraud prevention.
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