However, the paper money was not backed by gold or silver. The short-lived Yuan Dynasty printed increasing amounts of the currency, leading to runaway inflation. This problem was unresolved when the dynasty collapsed in Although the succeeding Ming Dynasty — also began by printing unbacked paper money, it suspended the program in For much of the Ming era, silver was the currency of choice, including tons of Mexican and Peruvian ingots brought to China by Spanish traders.
Only in the last two, desperate years of Ming rule did the government print paper money, as it attempted to fend off the rebel Li Zicheng and his army. China did not print paper money again until the s when the Qing Dynasty began producing yuan. Actively scan device characteristics for identification.
Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. The government would continue to issue new notes, but because it never withdrew the old ones from circulation, this led to depreciation, as we will see later. During the Song Dynasty that came after Tang, there would be great changes that would make paper money even more popular.
For example, the central and provincial governments licensed many shops in towns where people could go to exchange their coin money for paper notes.
Many years later, Song would take control of this situation and make the issuing of paper money a government affair and would print paper money Jiaozi and release it into the system directly without going through agencies. This led to the establishment of factories in Anqi, Huizhou, Hangzhou, and Chengdu where the paper money would be printed using special methods such as mixing different fibers to prevent the printing of counterfeit money.
Printing woodblocks sort of like stamping would be dipped in various colors for printing. These colors could be as many as six.
It was determined that the notes would expire in three years. Nearly years before paper money arrived in Europe , it was already being used for trade in China. This means that paper money came to be around BC. While it made trade easy, paper money in China did not come without its ill effects.
Compared to traditional money made from precious metals, paper money was easier to transport, and the use of paper money also freed up metal that could be put to other use. As mentioned above, the earliest known use of paper money in China is from the Tang dynasty.
This dynasty lasted from the year to AD, and paper money appeared around year By using certificates, the government could avoid having to transport metal money far away. Each certificate had a certain amount of money stated on it and was redeemable for metal cash on demand in the Chinese capital. Most merchants never went through the trouble of going to the capital to get cash for their certificate, instead the certificates were used as money locally, since they were transfereable.
Real paper money was introduced early during the Song dynasty by a group of wealthy merchants and financiers in Szechuan. Learn more about this coin at the British Museum website. For centuries, the basic unit of currency in China was the bronze or copper coin with a hole in the center for stringing. Large transactions were calculated in terms of strings of coins, but given their weight these were cumbersome to carry long distances.
As trade increased, demand for money grew enormously, so the government minted more and more coins. By the output of coins had increased tenfold since Tang times to more than 6 billion coins a year. The use of paper currency was initiated by merchants.
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