Historians are not certain how the United States began using the $ as a dollar sign.
Some believe that it came from a design marked on old Spanish coins called pieces of eight. These pieces of eight were used by Americans as dollars before they coined their own silver dollars.
A Spanish piece of eight was given its name because eight smaller coins equaled that coin.
One side of the piece of eight had two pillars stamped on it, with a ribbon curling around them. The “S” formed by the ribbon around each pillar may have led to our dollar sign, $.
I have always believed that when the United States started using paper money (IOU’s) during the gold rush, the dollar sign was in fact an S with a U overlay (United States). Over time, the bottom of the U was lost and it became an S with TWO lines running through it. Maybe I’ve been wrong all this time; maybe not.
The term peices of eight comes from the fact that the spanish coin in question was cut into eight peices, not that the coin was the same value as eight smaller ones.