Currency, precious metals, taxes, and training

I'm currently writing the equipment section for my "minimalist OSR" game. I've recently gone back to XP per gold spent. Hopefully, that will encourage PCs to donate to church, sleep indoors, carouse, or whatever is appropriate to their alignment and personality. But that's a whole other discussion.

What I want to talk about today is precious metals, and specifically a problem I keep coming back to: gold's value is severely degraded in D&D. On one hand, I want to be more or less faithful to the original rules. On the other, I like to maintain at least a minimum of internal coherence, and I can't shake my discomfort with the idea of any common weapon being worth almost its weight in gold (or, in the case of a bow, more than its weight in gold). At that point, gold is too heavy to even be considered a viable currency, and copper starts to feel less like medieval coinage and more like the Weimar Republic, with people hauling wheelbarrows of coins just to buy bread.

I've heard various explanations for this, the most common being a kind of gold rush that inflates prices across the board, so a sword ends up costing ten to a hundred times more than it would in actual history. Then there's the coin size problem: ten coins weigh about a pound, which is absurdly impractical (in my current system I am considering 100 coins to weight about a couple of pounds, which improves things somewhat).

The other issue is player wealth. If characters earn more than half their XP from gold, a fighter reaching level six might already be sitting on 10,000 gp or more. He can essentially buy every piece of available equipment (and wagons to carry it, with horses to pull it...), even at inflated prices, and hire several retainers on top of that (which isn't necessarily bad). The problem is that my players, specifically, start treating wealth accumulation as the point of the game. They stop spending, the pressure to go out and find more treasure starts to feel increasingly artificial and forced, and the whole economy becomes more and more implausible, even if the adventures keep coming.

There are several standard fixes for this. Many people suggest draining gold through taxes, maintenance fees, making PCs targets for bandits, or (as AD&D recommends) requiring them to pay for training to level up. 

None of that appeals to me. I can hardly imagine Conan or Elric paying for a trainer (although they must have been trained according to their culture in status in the past). And my players, being perfectly rational (and I mean this is a fantasy, setting, of course...), will dodge every tax and respond to any tax collector with disproportionate violence. Worse, constantly handing out gold just to take it back makes me spend even more time focused on wealth, which is the opposite of what I want.

Then I read some Gorgon's Grimoire posts about the subject (like this), and an idea clicked into place; one that solves several of these problems at once, by letting the things I dislike cancel each other out.

Here's how it works: imagine that the legitimate local currency is whatever is stamped with the official seal of the local lord or empire (as suggested in conversation by Gorgon's Grimoire - thank you!). The coins the PCs pull out of dungeons are "frontier" coins; recovered from lost empires or inimical creatures, unregulated, unofficial, not recognized within current civilization. Any merchant who accepts them still has to exchange them for official currency before they can use them to buy anything inside the normal economy, which means they'll charge a heavy premium to cover that conversion cost.

This explains inflated prices without requiring an extreme gold rush. It's not only that goods are (notably) more expensive, it's that the PCs' money is worth less because of what it is and where it came from. They can't be bothered paying taxes or regularizing their hoard, and the prices they pay reflect that. Some merchants might try to smuggle the coins or find workarounds, but that's not the PCs' problem. Most will simply take the treasure to the appropriate authorities, pay the conversion fees, and pass the cost along.

It's a solution that feels organic rather than punitive, and it actually fits the fiction.

Of course, the occasional tyrannical ruler might start thinking the PCs are still not paying enough taxes, and some criminal guilds might consider a heist followed by forgery to make the coins legit... but then again, only occasionally. Money is not the main focus of the PCs or the game.