When the East India Company obtained possession of the Singapore in 1819, there was no dominant native currency. The Spanish dollar was the main unit of account, and other coins were also in circulation. The early days of Singapore was marked by an acute shortage of currency. Indian and Penang coins were made the official currency, but the merchants preferred the Spanish Silver Dollar and Mexican Silver Dollar (The high quality silver in these coins was the main reason for the merchants' preference). Peruvian, Bolivian and Hong Kong Silver dollars were also in used.
By around 1830, the shortage was so acute that the substantial Singapore merchants were forced to import their own tokens for local circulation. The official records were kept in Rupees, but everything else was done in dollars, resulting in confusion, inefficiency and public demonstration came to a head in 1867.
The Indian Act No.18 of 1835, which made only Indian coins the legal tender( in the straits settlements ). was repealed after 1 April 1867. The Silver dollar - Spanish, Mexican, Peruvian, Bolivian, and Hong Kong - was declared legal tender within the straits settlement. The American trade dollar and Japanese Silver yen were added to the list in 1874. Representation from the Far East trader led to the British Trade Dollar being struck in 1895.
This became legal tender in Hong Kong, the straits settlements, and Labuan. It was demonetized in 1904 after the straits settlement dollar was declared the legal tender.
