The pound was the currency of Newfoundland until 1865. It was subdivided into 20 shillings, each of 12 pence. The Newfoundland pound was equal to the British pound and British coins circulated, supplemented by locally produced tokens and banknotes. In 1865, the dollar was introduced at a rate of 1 dollar = 4 shillings 2 pence, with the significance being 1 dollar was equal to exactly 50d (i.e. 50 oldpence) for precise ease of exchange.
In 1854, the Union Bank of Newfoundland introduced 1 pound notes. The same denomination was issued by the Commercial Bank of Newfoundland from 1857. Both banks continued to issue notes denominated in pounds after the introduction of the dollar, although they did issue dollar notes in the 1880s.