Moo translates this verse, God set forth Jesus as a propitiatory sacrifice through faith, in his blood, for a demonstration of his righteousness because of passing over of sins committed before hand. The key term that I want to look at 'propitiation'. The word in the Greek is apparently (hilasterion).
Moo writes, 'What Paul means by designating Christ a hilasterion has been the subject of considerable debate. When the use of hilasterion in the Bible is consdiered, a strong case can be made for taking the word as a referance to the OT "mercy seat," the cover over the ark where Yahweh appeared (Lev. 16:2). For this is what the word refers to in its one other NT referance (Heb. 9:5), as well as in 21 of its 27 LXX [the offical Greek translation of the Old Testament of that time] occurances ... To be sure there are objections to taking hilasterion as a referance to the "mercy seat."'
Moo later writes, 'While Deissmann has shown that hilasteron usually means "means of propitiation" in ordinary Greek, C.H Dodd has argued that the word in the LXX means "means of expiation." ... "Propitiation" has referance to the turning away of wrath, and the appeasment of the "wrath of the gods" by various means is a frequent theme in Greek litrature ... The idea conveyed by the word [hilasteron] and its congates is thus, Dodd argues, the "covering," or forgiving, of sins, not the appeasing of God's wrath ... But Dodd is almost certainly wrong on this point. The OT frequently connects the "covering" or forgiving of sins with the removal of God's wrath ... When to the linguistic evidence we add the evidence of the context of Rom. 1-3, where the wrath of God is an overarching theme (1:18; cf. 2:5), the conclusion that hilasterion inludes referance to the turning away of God's wrath is iniscapable.'
Moo explains, 'This propitiation is, of course, altogether different from the pagan notions of propitiation. First ... the biblical conception of the wrath of God is far removed from the pagan picture of a capricious and ofetn vindictive deity. God's wrath is the inevitable and necessary reaction of absolute holiness to sin. ... Second, it is God himself who initiates the propitiatory offering ...'
Moo then says, 'Finally, we must decide whether Paul intends to present this wrath-averting sacrifice of Christ against the background of the typology of the mercy seat ... the lexical data combined with the theological appropraitness of the image, make it likely that Paul intends such an allusion. Christ, Paul implies, now has the place that the "mercy seat" had in Old covenant: the center and focal point of God's provision of atonement for his people. Since this atonement takes place by means of Christ's death as a sacrifice, and the word hilasterion includes referances to propitiation, translations such as "means of propitiation" and "propitiatary sacrifice" are not inacurate. But they may be too restrictive. "Mercy seat" would be all right if the broader theological connotations of the phrase were obvious ... "sacrifice of atonement" is as good as we can do.'