In 2017 a new £1 coin will appear in our pockets with a design extremely difficult to forge. In the mid-16th century, Elizabeth I's government came up with a series of measures to deter "divers evil persons" from damaging the reputation of English coinage and, with it, the good name of the nation.

The Royal Mint announced last month that in 2017 it will introduce a new £1 coin, said to be the "most secure coin in the world". The reason behind the decision, which could cost businesses as much as £20 million, is the surge in counterfeiting. It is estimated that around 3% of £1 coins are fakes with an estimated 45 million forgeries in circulation.

Four and a half centuries ago, Elizabeth I made the reform of currency one of her government's top priorities. Invested as queen in 1558, she inherited a coinage which was fraught with problems. Elizabeth's father, Henry VIII, had authorised a series of debasements which meant that in the space of just seven years the silver content of English coins was reduced by more than 80%. Counterfeiting was rife, with contemporary reports claiming that a great multitude of "noythy [naughty] money" was in circulation.

Research by Jennifer Bishop, a PhD candidate in Cambridge University's History Faculty, looks at 16th-century perceptions of coinage on an everyday level: on the street and in the market place where the bulk of transactions took place at a time when prices were rising and good monies were scarce.

Bishop's exploration of the Elizabethan coinage is part of a wider study of metallurgical and monetary matters in mid-16th century England. She explained: "What interests me is how these topics were understood and discussed by ordinary people. My sources range from the official texts of royal proclamations and legislation to the uncontrolled circulation of rumours and gossip. Together, these sources show how popular perceptions of the coinage affected government policy and vice versa."

A good coinage was important because it provided the basic standard on which most transactions and reckonings were calculated in 16th century England. Over and above that, the status of the country's coinage reflected its reputation on the international stage and the authority and competence of its government. Debasement of the coins in circulation wreaked havoc in the marketplace: at one time the shilling, the original value of which was 12d, was worth half its value at 6d and at its lowest point traded for just 2¼d.