When we think about money we think about paper bills, which are also called “bank notes,” and coins. We don’t usually think about leather money. The Chinese did, however, and designed the leather bank note in 118 B.C. Scholars believe this was the first bank note used by any nation, and it was made from white deerskin. Leather money was much larger than the paper money we are used to today. The Chinese cut the deerskin into 1 square-foot pieces. They also painted the edges of the currency with bright colors. The Chinese exchanged the leather currency for goods, beginning one of the earlier systems of commerce.
When studying the history of paper money, we also see that the Chinese were the first to introduce paper currency in 9th century. In fact, the Chinese used their paper currency for centuries before European nations began to accept the bank note. European history of paper money dates back to the 13th century when explorer Marco Polo discussed Chinese paper currency in his writings. Despite its practicality – coinage was extremely heavy at that time and paper money was lighter and easier to carry – Europe did not formally adopt paper currency until 1661, when the Bank of Sweden introduced the “Stockholms Banco.”
It is no surprise that the Chinese were the first to design and adopt the bank note. When studying the history of Chinese currency prior to leather money, we see that this nation has been using some form of currency for over 3,000 years. Some scholars even believe that Chinese currency dates back as far as 4,500 years ago – during the New Stone Age – when it first began trading goods for cowry shells. These small shells look almost like tiny eggs and are either white or come in a variety of colors and patterns. China wasn’t the only nation to use cowry shells for currency. Over the centuries, Africa, Australia and America have also used cowry shell currency.
Qin Shi Huang was the first Chinese emperor, and he lived from 259B.C. to 210 B.C. He began his reign in 221 B.C., and ruled over China until his death at the age of 49 in 210 B.C. During his dynasty, Huang implemented a uniform monetary system. He did away with all the types of currency that the Chinese were using up to that point and introduced the copper coin as China’s official currency. This paved the way for the leather and paper bank notes, which were used alongside the copper coins until the late 19th century when the yuan was introduced as China’s official currency.
Today, all nations use some form of paper bank note and/or coin currency. This is, in large part, due to the history of Chinese currency and its impact on the exchange of goods for money. China, itself, has three forms of active currency: the renminbi, Hong Kong dollar and Macanese pataca. The renminbi is a derivative of the yuan and is the official currency used by the people of mainland China. The Hong Kong dollar and the Macanese pataca are the forms of currency used in Hong Kong and Macau, respectively.
Information on Chinese Currency
- Currency Information and Research for the Foreign Exchange Industry: Links of Interest Related to the Chinese Yuan
- Oracle ThinkQuest: The History of Money
- PBS Presents NOVA: The History of Money
- The Central Intelligence Agency World Factbook: China and Chinese Economy
- University of Missouri Museum of Anthropology: Chinese Coins
- The Chinese Monetary System: From Ancient Times to the Early Modern Period
- Columbia University: The Song Economic Revolution
- Princeton/Stanford Working Papers in Classics: The Monetary Systems of the Han and Roman Empires
An Overview of China and Chinese History
- University of Massachusetts Amherst: China
- Mrs. Nelson’s 7th Grade Academic Book: China Internet Resources
- Ancient Civilizations for Kids: China
- History and Social Sciences: Resources for World History I and II
- Foothill Intermediate School: Useful Links on China
- Central York Middle School: China Useful Links
Information on the Many Languages Spoken in China
- Purdue University College of Liberal Arts: Chinese Language Related Links and General Information on China
- Southwest Florida Chinese Language School: Chinese Language Links
- California State University East Bay: History of Chinese Language
- Yale University: History of Chinese Characters
- University of Maine System: Games and Stories in Chinese