What is an "International Monetary System?" It is commonly defined, as an "institutional framework" that functions so that international payments can be made, exchange rates among different currencies can be determined, and investment can be facilitated. (Eun and Resnick, 2004) In general, the discussion of international monetary systems begins with the industrialized (or soon-to-be-industrialized) countries of the late 18th century. Some authors begin the discussion with bimetallism, starting with France in 1789, or with the United States in 1792. Discussions of International monetary systems do not typically begin much earlier. However, as international finance specialists begin to study early nonmetallic currencies, it appears that many of them share important characteristics with more recent systems. International monetary systems do not need explicit central bank agreements to function. Regional de facto arrangements, in the aggregate, can be international monetary systems also. That is the claim that the authors make for the cowrie (or cowry) currency of the Yoruba.

That it was an international currency is now not in question. Cowrie currency has been used not only in Yoruba land, but in much of Africa, China and India. And it formed part of the international reserves of the Bank of England. While such commodity currencies have been regarded as primitive or not really money in the past, economic historians have shown that the cowrie currency in fact satisfies all the requirements of money: store of value, unit of account, and transaction value. And it was impossible to counterfeit or adulterate, unlike the possibly more primitive metal currencies. This paper discusses various aspects of cowrie currency in terms of its use in a de facto international monetary system, especially within the Yoruba areas, and concludes that it was neither a primitive money nor an insignificant part of an international monetary system. International finance issues such as central bank intervention, fixed and flexible exchange rates, and dual currency problems are analyzed within the cowrie currency framework. The paper concludes with suggestion for the further study.