At the time, the Mexican dollar was a variant of the Spanish one, a silver coin worth eight reales (the basic unit of Spanish currency back then). The Spanish eight-real coin was the de facto trading currency of the New World for centuries - it was legal tender in the US until the 1850s, which is why you'll sometimes see old American paper money that says it can be exchanged for $FACEVALUE "Spanish milled Dollars" - and the Mexican variety persisted as a world currency for some time after the Spanish empire faded away, especially in remote places without much native coinage of their own. Mongolia would definitely count.
(The modern name of the Mexican basic unit of currency, peso, comes from the eight-real coin's Spanish nickname, peso de ocho, which is also where we get the common English nickname for them, "pieces of eight".)
As for why it was useful, well, coinage isn't like paper money. If you didn't set any stock by the Spanish (or Mexican) government's assertion of the real's face value, the eight-real coin was still an ounce of silver. They made b'jillions of them (and why not, with the entire mineral wealth of South and Central America to plunder)?
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Date: 2009-05-06 06:41 pm (UTC)(The modern name of the Mexican basic unit of currency, peso, comes from the eight-real coin's Spanish nickname, peso de ocho, which is also where we get the common English nickname for them, "pieces of eight".)
As for why it was useful, well, coinage isn't like paper money. If you didn't set any stock by the Spanish (or Mexican) government's assertion of the real's face value, the eight-real coin was still an ounce of silver. They made b'jillions of them (and why not, with the entire mineral wealth of South and Central America to plunder)?