Wednesday, January 2, 2013

NBB - Chinese Metallic Money and Cash

"Chinese monetary history is a topic that requires readers to leave behind certain concepts that have characterised our money for some time. The emergence of metallic money gave rise to two distinct traditions. The first, which the West has inherited, originated in Mesopotamia around the second millennium BC and is characterised by the use of precious metals as a payment instrument. The so-called intrinsic value of the money is determined by the weight and purity of the metal. In China, by contrast, money has had an eminently fiduciary character from the start. Its value was guaranteed by ties of trust between economic agents and the issuer, but most importantly by quantitative control of the coinage. Chinese metallic money, in general, was thus conditioned by its singular function, facilitating transactions. Currencies with a high intrinsic value (gold, jade, silver, tortoise shell, etc.) were used as stores of value. Putting these into circulation would have led to hoarding, which would have prevented them from serving their function. .."

Source: http://www.nbbmuseum.be/2011/07/chinese_money.htm

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