# History of Chinese currency

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Published: 2026-10-30T17:53:45.221Z

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The history of Chinese currency spans more than 3000 years from ancient China to imperial China and modern China. Currency of some type has been used in China since the Neolithic age which can be traced back to between 3000 and 4500 years ago. The history of China's monetary system traces back to the Shang dynasty (c. 1766–1154 BCE), where cowrie shells served as early currency. Cowry sh

## Key facts

## Overview

The history of Chinese currency spans more than 3000 years from ancient China to imperial China and modern China. Currency of some type has been used in China since the Neolithic age which can be traced back to between 3000 and 4500 years ago. The history of China's monetary system traces back to the Shang dynasty (c. 1766–1154 BCE), where cowrie shells served as early currency. Cowry shells are believed to have been the earliest form of currency used in Central China, and were used during the Neolithic period. By the Warring States period, diverse metal currencies like knife and spade coins emerged. These early currencies, starting as a commodity exchange to cowrie shells, copper coins, paper money and modern Chinese currencies and digital currencies shows how centralized power developed the most influential monetary system in the world. Early Establishment The Shang dynasty (c. 1600 – c. 1046 BC) came as a significant first step in the evolution of currency by introducing cowrie shells as a mode of exchange. Cowries, sourced from the Indian Ocean, were valued for their rarity, durability, and portability. Their usage as currency likely came from their symbolic value which represented wealth and status. Archaeological findings, such as cowrie shell imitations made of bone and stone, indicate the growing institutionalization of monetary practices during this period. One of the reasons why they started producing cowrie shell imitations was mainly due to the lack of organic cowrie shells. New Research on the Origin of Cowries in Ancient China by K.Peng also mentions tributes and exchanges involving cowries, highlighting their role in economic context. Zhou dynasty ((Western Zhou c. 1046 – 771 BC) and (Eastern Zhou c. 771 – 256 BC)) saw the diversification of currency forms. By the late Western Zhou and early Eastern Zhou, bronze objects such as spades and knife-shaped coins began circulating alongside cowries. These currencies reflected both regional economic diversity and the growing influence of metalworking technologies. The Warring States period (c. 475 – 221 BC) expanded on the diversity of currencies as competing states issued their own coinages to assert economic independence. Bronze inscriptions on Zhou coins serve as primary evidence which gives details about issuing authorities and intended denominations. These inscriptions show the relationship between political authority and economic systems. Qin dynasty (c. 221 – 206 BC) specifically Around 210 BC, the first emperor of China Qin Shi Huang (260–210 BC) abolished all other forms of local currency and introduced a uniform "Ban Liang" copper coin which eliminated the regional variations that had characterized the Warring States period and showed economic integration and simplifying taxation. Qin legal texts found in tombs (e.g., Shuijingzhu bamboo slips) document the implementation of the Ban Liang coins and highlight their role in centralizing economic control. This standardization served as a model for future dynasties that influenced monetary policies in subsequent centuries. Building on the Qin's monetary reforms, the Han dynasty (c. 202 BCE – 220 CE) later introduced "Wu Zhu" coins, which remained in circulation for over 700 years. The Han government's emphasis on coinage stability facilitated trade along the Silk Road, integrating China into a broader network of Eurasian commerce. These coins, marked by their consistent weight and size, reflected the dynasty's commitment to economic stability. The Han period also saw the integration of commodity trade and currency usage. Goods like silk, salt, and iron often supplemented or substituted coinage in transactions, particularly in regions where coin circulation was limited. Paper money was invented in China in the 7th century, but the base unit of currency remained the copper coin. Copper coins were used as the chief denomination of currency in China until the introduction of the yuan. From paper money innovations in the Song dynasty to the turbulent reforms of the late Qing, China's monetary system evolved with its political and economic changes. Currently, the renminbi is the official currency of the People's Republic of China (PRC). It is the legal tender in mainland China, but not in Hong Kong or Macau. The special administrative regions of Hong Kong and Macau use the Hong Kong dollar and the Macanese pataca, respectively. In the territory controlled by the Republic of China (ROC), the New Taiwan dollar is the official legal tender in Taiwan since 2000.

## Ancient currencies

The use of shell money is attested to in the Chinese writing system. The traditional characters for 'goods' (貨), 'buy/sell' (買/賣), and 'monger' (販), in addition to various other words relating to 'exchange', all contain the radical 貝, which is the pictograph for shell (simplified to 贝). The extent of the circulation of shell money is unknown, and barter trade may have been common. However, copies of cowry shells made out of bone, wood, stone, lead and copper were common enough to presume that they were used in trade.

Cowries, sourced from the Indian Ocean, were valued for their rarity, durability, and portability. Their usage as currency likely came from their symbolic and practical value which represented wealth and status. Archaeological findings, such as cowrie shell imitations made of bone and stone, indicate the growing institutionalization of monetary practices during this period. One of the reasons why they started producing cowrie shell imitations was mainly due to the lack of organic cowrie shells. New Research on the Origin of Cowries in Ancient China by K.Peng also mentions tributes and exchanges involving cowries, highlighting their role in both economic and ceremonial contexts. The Chinese may have invented the first metal coins, coins found in Anyang date to before 900 BC. At that time, the coin itself was a mock of more earlier used cowry shells, so it was called the Bronze shell. Bronzed shells were found in the ruins of Yin, the old capital of the Shang dynasty (1500–1046 BC). Bronze became the universal currency during the succeeding Zhou dynasty, which saw the diversification of currency forms. By the late Western Zhou and early Eastern Zhou, bronze objects such as spades and knife-shaped coins began circulating alongside cowries. During the Warring States period, from the 5th century BC to 221 BC, Chinese money consisted of three main types of bronze objects. The Zhou, the Wei (魏), the Han (韓) and the Qin (秦) all used coins shaped like a spade (bu). The Qi (齊) used money in the shape of a knife (dao). The Zhao (趙) and the Yan (燕) used knife money before switching over to spade money roughly halfway through the Warring States period. The Chu (楚) used money in the forms of "ant nose" coins (yibi).

## Unification

As part of the Unification of China, Qin Shi Huang (Chinese: 秦始皇; pinyin: Qín Shǐ Huáng, 260 BC – 210 BC) introduced a uniform copper coin with the inscription "Ban Liang" based on the coins previously used by the Qin. All other forms of local currency were abolished. This standardization eliminated the regional variations that had characterized the Warring States period, fostering economic integration and simplifying taxation. Qin legal texts found in tombs document the implementation of the Ban Liang coins and highlight their role in centralizing economic control. The coins were round with a square hole in the middle which was the common design for most Chinese copper coins until the 20th century. Due to the low value of an individual coin, the Chinese have traditionally strung a nominal thousand copper coins onto a piece of string. Government taxes were levied on both coins and products such as rolls of silk. Salaries were paid in "stones" (石, dàn) of grain during the Qin and Han dynasties.

## Han

The Han dynasty issued Wu Zhu coins, which remained in circulation for over 700 years. The Han government's emphasis on coinage stability facilitated trade along the Silk Road, integrating China into a broader network of Eurasian commerce. These coins were marked by their consistent weight and size. The Han period also saw the integration of commodity trade and currency usage. Goods like silk, salt, and iron often supplemented or substituted coinage in transactions, particularly in regions where coin circulation was limited.

## Tang

By the time of the Tang dynasty, the solidification of Confucianism as the primary political school of thought had similarly entrenched China as an agrarian society. The Han dynasty had allowed for debate on government monopolies on the iron and salt trade, to which scholars voiced disapproval due to disreputable connotations on industry and commerce. Under the Tang dynasty, China saw the enactment of the two-tax system, or 两税法, that measured revenues against expenditures directly. As a result of policy, the dynasty set a static budget that was intended to be observed throughout the dynasty. The Tang dynasty adopted an early prototype of paper currency starting with promissory notes in Sichuan called "flying money" (Feiqian/飞钱). These were designed to expedite trade between the Tang capital and urban centers, and the rural industrial bases, such as the mining of copper and iron in Sichuan. By issuing Feiqian, the Tang dynasty was able to lessen the burden and risk of transporting large amounts of currencies, such as the accumulated weight and the potential to be robbed in transit. Although they were traded among merchants, Jiaozi was not intended to be currency, but rather akin to modern day bank drafts. They could only be redeemed at government offices or the centers of government sponsored groups. These proved so useful the state took over production of this form of paper money with the first state-backed printing in 1024. By the 12th century, various forms of paper money had become the dominant forms of currency in China and were known by a variety of names such as jiaozi, huizi, kuaizi, or guanzi.

## Song

During the early Song dynasty (Chinese: 宋, 960–1279), China again reunited the currency system, displacing coinages from ten or so independent states. Among pre-Song coins, the northern states tended to prefer copper coins. The southern states tended to use lead or iron coins, with Sichuan possessing its own heavy iron coins which continued to circulate for a short period into the Song dynasty. By 1000 CE, unification (south of the Liao) was complete and China experienced a period of rapid economic growth, reflected by the growth of coining. In 1073—the peak year for minting coins in the Northern Song—the government produced an estimated six million strings containing a thousand copper coins each. The Northern Song is thought to have minted over two hundred million strings of coins which were frequently exported to Inner Asia, Japan, and South-East Asia, where they often formed the dominant form of coinage. The Song dynasty saw the first true introduction of paper money as currency. This was termed Jiaozi, or 交子, and saw initial adoption in Sichuan to facilitate the commodity trade. As it started to expand outside of Sichuan, the Song dynasty saw an increase in inflation due to the overprinting of paper money that didn't have sufficient backing in reserve through precious metals. Later dynasties such as the Yuan and Ming saw similar cases of inflation that lead to the Ming and Qing returning to silver as the primary method of commerce.

## Yuan

The Mongol-founded Yuan dynasty (Chinese: 元, 1271–1368) also attempted to use paper currency. Unlike the Tang dynasty, they created a unified, national system that was not backed by silver or gold. The currency issued by the Yuan was the world's first fiat currency, known as Jiaochao. The Yuan government attempted to prohibit all transactions in or possession of silver or gold, which had to be turned over to the government. Inflation in 1260 caused the government to replace the existing paper currency with a new one in 1287, but inflation that resulted from undisciplined printing remained a problem for the Yuan court until the end of the Yuan dynasty. The following is Marco Polo's account on the use of paper money as issued by the Yuan dynasty: “With these pieces of paper, made as I have described, he \[Khubilai Khan\] causes all payments on his own account to be made; and he makes them to pass current universally over all his kingdoms and provinces and territories, and whithersoever his power and sovereignty extends. And nobody, however important he may think himself, dares to refuse them on pain of death. And indeed everybody takes them readily, for wheresoever a person may go throughout the Great Kaan’s dominions he shall find these pieces of paper current, and shall be able to transact all sales and purchases of goods by means of them just as well as if they were coins of pure gold. And all the while they are so light that ten bezants’ worth does not weigh one golden bezant. Furthermore all merchants arriving from India or other countries, and bringing with them gold or silver or gems and pearls, are prohibited from selling to any one but the Emperor. He has twelve experts chosen for this business; these appraise the articles, and the Emperor then pays a liberal price for them in those pieces of paper. The merchants accept his price, for in the first place they would not get so good a one from anybody else, and secondly they are paid without any delay. And with this paper-money they can buy what they like anywhere over the Empire, whilst it is also vastly lighter to carry about on their journeys. Several times in the year, merchants brought wares to the amount of 400,000 bezants, and the Grand Sire pays for all in that paper. So he buys such a quantity of those precious things every year that his treasure is endless, whilst all the time the money he pays away costs him nothing at all. Moreover, several times in the year proclamation is made through the city that anyone who may have gold or silver or gems or pearls, by taking them to the Mint shall get a good price for them. And the owners are glad to do this, because they would find no other purchaser give so large a price. Still, in this way, nearly all the valuables in the country come into the Kaan’s possession.”

## Ming

The early Ming dynasty (Chinese: 明; pinyin: Míng, 1368–1644) also attempted to use paper currency in the early re-unification period. This currency also experienced rapid inflation and issues were suspended in 1450 although notes remained in circulation until 1573. It was only in the very last years of the Ming dynasty when Li Zicheng threatened Beijing in 1643 and 1645 that printing took place again. For most of the Ming, China had a purely private system of currency for all important transactions. Silver, which flowed in from overseas, began to be used as a currency in the Far South province of Guangdong, where it spread to the lower Yangtze region by 1423 when it became legal tender for payment of taxes. Provincial taxes had to be remitted to the capital in silver after 1465; salt producers had to pay in silver from 1475 and corvée exemptions had to be paid in silver from 1485. The Chinese demand for silver was met by traditional maritime silk road trade links, from either Quanzhou, Zhangzhou, Guangzhou, or Macau, with Manila in the Philippines as part of the Spanish East Indies who traded Philippine peso (Spanish silver dollars) for chinaware and other trade goods, after the Spanish colonial empire became established at Manila in 1571. The Spanish silver dollar were minted and mined from the Spanish Americas, in particular Potosí in Peru and Mexico. The trade of Spanish silver dollars with chinaware and other trade goods flowed through the Manila-Acapulco Galleon Trade from the Philippines to Mexico and vice versa within the Spanish colonial empire. It circulated as minted Spanish dollars sometimes stamped with Chinese characters known as "chop marks" which indicated that they were verified by a merchant and determined to be genuine. Spanish silver also circulated as ingots (known as sycee or yuanbao) which weighed a nominal liang (about 36 grams) although purity and weight varied from region to region. The liang was often referred to by Europeans by the Malay term tael. The first Chinese yuan coins had the same specification as a Spanish dollar, leading to a continuing equivalence in some respects between the names "yuan" and "dollar" in the Chinese language.

## Qing

The period spanning the late Qing dynasty to the establishment of the People's Republic of China marked a critical phase in the evolution of China's monetary system. This era was characterized by efforts to unify fragmented currencies, stabilize the economy, and modernize financial governance, all unfolding against a backdrop of war and political upheaval.

Late Imperial China maintained both a silver and a copper currency system. The copper system was based on the copper cash (wen). The silver system had several units which by the Qing dynasty were: 1 tael = 10 mace = 100 candareens = 1000 lí (silver cash). By the late 19th century, the Qing dynasty faced a fragmented monetary system in which silver ingots, copper cash (tongqian), and foreign coins circulated simultaneously. This disarray hampered commerce, tax collection, and efforts to integrate the economy into global trade. In response, the Qing government sought to unify the currency system and align it with international norms. In 1889, the Chinese yuan was introduced at par with the Spanish dollar or Mexican peso or Philippine peso and was subdivided into 10 jiao (角, not given an English name, cf. dime), 100 fen (分, cents), and 1000 wen (文, cash). The yuan was equivalent to 7 mace and 2 candareens (or 0.72 tael) and, for a time, coins were marked as such in English. A significant step came in 1903 with the introduction of Kuangxu Yuanbao (光绪元宝) coins. Minted in various provinces, these coins represented an early attempt at standardization. However, inconsistencies in weight, design, and issuance authority limited their impact. The government further advanced these efforts in 1910 by adopting a silver standard and issuing the Da Qing Silver Coin (大清银币). This coin, available in denominations of 1 yuan, 5 jiao, and smaller units, featured the imperial dragon emblem as a symbol of authority. Minted to international trade standards, it aimed to facilitate both domestic and international commerce. The edicts surrounding these reforms, such as the 1905 Monetary Regulations, highlighted the Qing government's determination to modernize fiscal governance (Qing Dynasty Monetary Regulations, 1905). The earliest issues were silver coins produced at the Kwangtung mint in denominations of 5 fen, 1, 2 and 5 jiao and 1 yuan. Other regional mints were opened in the 1890s producing similar coins. Copper coins in denominations of 1, 2, 5, 10 and 20 wen were also issued. The central government began issuing its own coins in the yuan currency system in 1903. Banknotes were issued in yuan denominations from the 1890s by several local and private banks, along with the "Imperial Bank of China" and the "Hu Pu Bank" (later the "Ta-Ch'ing Government Bank"), established by the imperial government. Despite these ambitious reforms, the Qing dynasty's weakening grip on power, exacerbated by the 1911 revolution, left the currency system fragmented. Regional mints and private banks (qianzhuang) continued to issue diverse forms of currency, perpetuating monetary instability.

## Republic of China

The fall of the Qing dynasty and the establishment of the Republic of China in 1912 did little to resolve monetary disarray. Warlords, provincial governments, and foreign powers issued their own currencies, further complicating the financial landscape. Amid this chaos, the Republic sought to assert control over the monetary system through centralized reforms. The Bank of China (中国银行), founded in 1912, was instrumental in modernizing China's monetary and financial systems during the Republic era. Initially serving as the central bank, it later focused on issuing banknotes and managing foreign exchange. The Bank of China's issuance of its own notes, alongside Fabi, highlighted the dual nature of the monetary system during this period. Despite its contributions to economic modernization, the bank's influence diminished with the rise of centralized monetary control under the Communist government after 1949.

## Silver coins

The Republic of China was founded after the Xinhai Revolution toppled the Qing dynasty. The Nanjing-based Provisional Government of the Republic of China urgently needed to issue military currency for use in place of the previous Qing currency. Successively, each province declared independence from the Qing and issued their own military currency. In 1914, the National Currency Ordinance established the silver dollar as the national currency of the Republic of China. Although designs changed compared with imperial era coins, the sizes and metals used in the coinage remained mostly unchanged until the 1930s. The majority of regional mints closed during the 1920s and 1930s, although some continued until 1949. From 1936, the central government issued copper 1⁄2, 1 and 2 fen coins, nickel (later cupronickel) 5, 10 and 20 fen and 1⁄1 yuan coins. Aluminium 1 and 5 fen pieces were issued in 1940. During most of the Nanjing decade, China's currency was on the silver standard. It was necessary for the Nationalist government's expenses to be balanced by sales of government bonds, tax revenues, and other receipts. The 1920s and 1930s saw the price of silver appreciate in the international market, increasing the purchasing power of the Chinese currency and leading to a massive efflux of silver out of China. It became evident to the Chinese government that it could not retain the Silver Standard without debt defaults increasing, and so chose to abandon it. The situation was exacerbated by the multitude of commercial, provincial and foreign banks issuing currencies all at different values. A significant step came in 1903 with the introduction of Kuangxu Yuanbao (光绪元宝) coins. Minted in various provinces, these coins represented an early attempt at standardization. However, inconsistencies in weight, design, and issuance authority limited their impact. The government further advanced these efforts in 1910 by adopting a silver standard and issuing the Da Qing Silver Coin (大清银币). This coin, available in denominations of 1 yuan, 5 jiao, and smaller units, featured the imperial dragon emblem as a symbol of authority. Minted to international trade standards, it aimed to facilitate both domestic and international commerce. The edicts surrounding these reforms, such as the 1905 Monetary Regulations, highlighted the Qing government's determination to modernize fiscal governance.

## Fabi

In 1935, the Nationalist government issued a new currency, the fabi (Chinese: 法幣; pinyin: fǎbì; Wade–Giles: fa-pi), through the four major government controlled banks: the Bank of China, Central Bank of China, Bank of Communications, and the Agricultural Bank of China. H.H. Kung, the Nationalist government's Finance Minister, directed the creation of the fabi. This fiat currency replaced the silver standard. This reform, managed by the Central Reserve Bank, aimed to reduce reliance on silver, which had been subject to international manipulation, particularly by the United States through the Silver Purchase Act of 1934. Official government documents from the reform, such as the Proclamation on the Implementation of the Fabi System (1935), emphasized its goals of stabilizing the currency and fostering economic growth The Fabi Reform had significant effects: it insulated China from fluctuations in global silver prices and laid the groundwork for a more centralized monetary policy.The reform curtailed the issuance of private and regional currencies, consolidating financial control under the Nationalist government. No separate institution existed to control the money supply, and therefore the political leadership of the Nationalist government was free to dictate the money supply. When it came to military expenses, Chiang Kai-shek decided how much money he needed and ordered H.H. Kung to supply it. The onset of World War II saw a sharp devaluation of the fabi currency. This was largely due to the unrestrained issuance of the currency to fund the war effort. The Nationalist government sought to ensure that the fabi remained convertible into foreign currency and expended large amounts of foreign exchange in an effort to maintain the pre-war exchange rate. This approach became unviable and on March 13, 1938, the Nationalist government imposed strict foreign exchange controls. Foreign banks operating in China could evade most of these controls, however, and continued to move money out of the country. By October 1938, the Nationalist government lost control of its economic center to the invading Japanese. Military expenditures remained high, but tax revenues plunged. Printing of the fabi sought to cover the difference. After its 1941 declaration of war against the United States and the United Kingdom, Japan moved into the foreign-controlled areas of Shanghai that it had not previously occupied after its success in the Battle of Shanghai. It seized most of the banks in these areas of Shanghai and declared that fabi within Shanghai and occupied Tianjin had to be exchanged for bank notes of the Wang Jingwei regime. For most Chinese in these occupied areas, the exchange meant that their fabi lost half its value and a major blow to the economy of the lower Yangzi resulted. The period from the late Qing to the early years of the People's Republic illustrates China's struggle to modernize its monetary system in the face of internal and external challenges. Reforms such as the introduction of the Da Qing Silver Coin, the Fabi system, and ultimately the Renminbi reflect a nation striving for stability and modernization. Each phase of this journey, shaped by political transitions and economic upheaval, contributed to the formation of the unified monetary system that underpins China's contemporary financial strength.

## Sources

- History of Chinese currency · Wikipedia: https://en.wikipedia.org/?curid=2279469

Source: Wikipedia contributors — https://en.wikipedia.org/?curid=2279469&oldid=1382822950

Licence: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/

Adaptation notice: Reformatted for XPay; the source may be abridged, restructured or translated. Consult the cited revision for the original.