How precious metals like gold, silver, and bronze ended up making the coins for ordinary, non-rich people

Gold, silver, and bronze—the materials from which coins were made—had long been the media of international trade; but until that time, only the rich actually had much in their possession.

A typical Sumerian farmer may well have never had occasion to hold a substantial piece of silver in his hand, except perhaps at his wedding. Most precious metals took the form of wealthy women’s anklets and heirloom chalices presented by kings to their retainers, or it was simply stockpiled in temples, in ingot form, as sureties for loans.

Somehow, during the Axial Age, all this began to change. Large amounts of silver, gold, and copper were dethesaurized, as the economic historians like to say; it was removed from the temples and houses of the rich and placed in the hands of ordinary people, was broken into tinier pieces, and began to be used in everyday transactions. How?

Israeli Classicist David Schaps provides the most plausible suggestion: most of it was stolen. This was a period of generalized warfare, and it is in the nature of war that precious things are plundered.
Soldiers who plunder may indeed go first for the women, the alcoholic drinks, or the food, but they will also be looking around for things of value that are easily portable.

A long-term standing army will tend to accumulate many things that are valuable and portable—and the most valuable and portable items are precious metals and precious stones. It may well have been the protracted wars among the states of these areas that first produced a large population of people with precious metal in their possession and a need for everyday necessities:

Where there are people who want to buy there will be people willing to sell, as innumerable tracts on black markets, drug dealing, and prostitution point out.

The constant warfare of the archaic age of Greece, of the Janapadas of India, of the Warring States of China, was a powerful impetus for the development of market trade, and in particular for market trade based on the exchange of precious metal, usually in small amounts.
If plunder brought precious metal into the hands of the soldiers, the market will have spread it through the population.

Now, one might object: but surely, war and plunder were nothing new. The Homeric epics, for instance, show a well-nigh obsessive interest in the division of the spoils. True, but what the Axial Age also saw—again, equally in China, India, and the Aegean—was the rise of a new kind of army, made up not of aristocratic warriors and their retainers, but trained professionals.

The period when the Greeks began to use coinage, for instance, was also the period when they developed their famous phalanx tactics, which required constant drill and training of the hoplite soldiers. The results were so extraordinarily effective that Greek mercenaries were soon being sought after from Egypt to Crimea. But unlike the Homeric retainers, who could simply be ignored, an army of trained mercenaries needs to be rewarded in some meaningful way.

One could perhaps provide them all with livestock, but livestock are hard to transport; or with promissory notes, but these would be worthless in the mercenaries’ own country. Allowing each a tiny share of the plunder does seem an obvious solution.

These new armies were, directly or indirectly, under the control of governments, and it took governments to turn these chunks of metal into genuine currency.

The main reason for this is simple capacity: to create enough coins that the people could begin to use them in everyday transactions required mass production on a scale far beyond the abilities of local merchants or smiths.

Of course, we have already seen why governments might have incentive to do so: the existence of markets was highly convenient for governments, and not just because it made it so much easier for them to provision large standing armies.

By insisting that only their own coins were acceptable as fees, fines, or taxes, governments were able to overwhelm the innumerable social currencies that already existed in their hinterlands, and to establish something like uniform national markets.

Actually, one theory is that the very first Lydian coins were invented explicitly to pay mercenaries. This might help explain why the Greeks, who supplied most of the mercenaries, so quickly became accustomed to the use of coins, and why the use of coinage spread so quickly across the Hellenic world, so that by 480 BC there were at least one hundred mints operating in different Greek cities, even though at that time, none of the great trading nations of the Mediterranean had as yet showed the slightest interest in them.

The Phoenicians, for example, were considered the consummate merchants and bankers of antiquity. They were also great inventors, having been the first to develop both the alphabet and the abacus. Yet for centuries after the invention of coinage, they preferred to continue conducting business as they always had, with unwrought ingots and promissory notes.

Phoenician cities struck no coins until 365 BC, and while Carthage, the great Phoenician colony in North Africa that came to dominate commerce in the Western Mediterranean, did so a bit earlier, it was only when “forced to do so to pay Sicilian mercenaries; and its issues were marked in Punic, ‘for the people of the camp.’”