This is a beard tax token from Russia. Beginning in 1698 Tsar Peter I began to prohibit the wearing of beards. The only way you could wear a beard is if you pay a tax, the ‘beard tax’, every year. This token had to be carried to show you paid it.
In 1698 he prohibited the wearing of beards by courtiers. The actual beard tax, requiring the token, was instituted in 1705. I’m not certain how long it lasted though. Only the Orthodox clergy could have beards tax free. The words above the moustache and beard mean “money taken”. I was told that the wording on the reverse says, in Cyrillic, “1705”, when the tax was instituted.
During that time, there were also regulations instituted that required, first the courtiers then later the common people, to adopt western clothing as well. My understanding is that Tsar Peter I thought the Russians were like some backward people and wanted to force them to be modernized like in western Europe.
I also discovered that King Henry VIII of England was the first to institute taxes on beards. This was in 1535. It was later adopted by his daughter, Queen Elizabeth I. I’m not sure of why it was adopted or if it was really enforced at all.