Old coins of Nepal were the Shakya Mahajanapada coins minted around 500 BCE. Next were the Punch-marked coins which were probably never minted at Nepal but were widely used in the southern region of Nepal. Ancient coins of Nepal belonged to the Kushan Empire which depicted the image of Kushan kings and other Hindu and Buddhist deities, and formed the major chunk of Nepal coins in this era.
Nepal coins of Classical period were of the Lichhavi Kingdom which were used widely in the Kathmandu valley and surrounding hills. Lichhavi minted coins called Pana (Tamrika), Purana, Pana-Purana and Matrika in copper and had legends in Gupta script. These coins were religious in nature and some have King’s name on them. The only known conversion rate is 1 Karshapana equal to 16 Pana.
The only known Medieval period Nepal coins are gold Sivaka, silver Dam, Nava-Dam-Sivaka and copper coins with legends Sri deva Yadasya. Coins of Malla Dynasty were struck by sons of Yakshya Malla in separate kingdoms of Kathmandu, Bhadgaon, Patan and by Kings of Dolakha and Gorkha. The coins consist of elaborate geometrically ornamented borders surrounding a central square or circle, with the legends in Nagari fitted into the spaces left in the design. On the obverse is the king's name, titles and date, and on the reverse various symbols accompanied sometimes by a further title or a religious formula.
Shah Dynasty Nepal coins issued regular mohar and dam coins with their queen’s name. These new coins were double in value and the weight of Mohur was struck equivalent to Indian Rupee. In 1865 the first copper coins of Nepal were issued in copper paisa, double paisa and dam denominations with inscriptions in Devnagari script. In 1932 Nepal rupee was introduced which replaced the older currency system.