alt Hacker NewsPaper money was well established at this point.
When the pound replaced the Spanish silver dollar as the default global currency, it did so with a nascent international banking system where banknotes issued by a certain bank in a certain location could be exchanged by other banks in other locations.
Payments were thus often settled in metal rather than being transacted with it.
Terry Pratchett’s Making Money portrays it quite well, imho. It doesn’t hurt that it’s an entertaining read.
I was surprised to realise bank notes used to be tied to a bank, not a state.