One of the most trustworthy versions of its story says that the Spanish peso used in colonial America was marked with the $ sign. The peso was abbreviated PS and it’s said that as time went on, the abbreviation was often written so that the S was on top of the P, producing an approximation of the $ symbol. This symbol is written near a sum in pesos in Oliver Pollock’s letter from 1778 (above) and the modern banknote wasn’t put into circulation until 1861.