Suppose that a rebellion succeeds in gobbling up most of an empire. It can be like the fall of the Chinese Qin dynasty, or something that goes off in West francia and destroys it before it can establish a precedent of being France. Or maybe the fall of the Sasanian Empire. This takes place pre industrial revolution and rifling. The rebels have military power and can quash any loyalist uprisings.
The old government occupies only a Rump State. It's tax revenue are 1/3000 of its pre-rebellion status. The rebels don't bother going after an island rump state with an agrarian base.
The rebels, now the new rulers, then issue a new currency, backed by gold, and also declare the old currency invalid for tax purposes. It's reduced to a trinket with no legal value. It can no longer be used to settle old debts, only the new currency can. The smelting value is say... 1/30 of its face value, except now there is no face value. You have to pay taxes or else. You can use the old currency, but you just can't use it to pay taxes. There are taxes for many forms of transactions, so you kind of need the new currency. The rebel leaders don't suffer infighting.
The rebels exchange some old currency for new ones, but only for a group of say... 30 families that supported the rebellion (including themselves). Everyone else is out of luck. Don't worry if you participated in the rebellion, you got 3 years of back pay in the new currency, just hope you didn't have lots of savings. And of course all new salaries are issued in the new currency.
Suppose that the vast majority of the farmers have some savings in the old currency (I know, usually revolutions happen when farmers are in the red)
Well what happens to the old currency? Do people still use the old currency for day to day use except taxation transactions? Or does its value collapse quickly? Are people's savings evaporated?
The old government occupies only a Rump State. It's tax revenue are 1/3000 of its pre-rebellion status. The rebels don't bother going after an island rump state with an agrarian base.
The rebels, now the new rulers, then issue a new currency, backed by gold, and also declare the old currency invalid for tax purposes. It's reduced to a trinket with no legal value. It can no longer be used to settle old debts, only the new currency can. The smelting value is say... 1/30 of its face value, except now there is no face value. You have to pay taxes or else. You can use the old currency, but you just can't use it to pay taxes. There are taxes for many forms of transactions, so you kind of need the new currency. The rebel leaders don't suffer infighting.
The rebels exchange some old currency for new ones, but only for a group of say... 30 families that supported the rebellion (including themselves). Everyone else is out of luck. Don't worry if you participated in the rebellion, you got 3 years of back pay in the new currency, just hope you didn't have lots of savings. And of course all new salaries are issued in the new currency.
Suppose that the vast majority of the farmers have some savings in the old currency (I know, usually revolutions happen when farmers are in the red)
Well what happens to the old currency? Do people still use the old currency for day to day use except taxation transactions? Or does its value collapse quickly? Are people's savings evaporated?