There have been several instances in history where paper money was backed by coins made of precious metal. China had issued huge bronze coins in the 14th century to back a paper money issue. Stephen Album Rare Coins is going to auction a similar rare 1350 5-qian coin, issued by Zhi Zheng of Yuan dynasty. The event will be held from 17th to 19th January and the coin would be offered with an estimated value of $2,500 to $3,500 U.S. The 154 grams coin has a diameter of 78 millimeters. The auction house states that the coin is in Very Fine condition.
Chancellor Toqto’a (Tuotuo) tried to change Yuan dynasty currency by producing more paper money along with large “Zhi Zheng Zhi Bao” copper coins in 1350. These coins bore a Promise Text that they were backed in paper money, and were equivalent in value. However, paper money got damaged easily as they were produced using low-quality material. Redeeming money became more difficult, leading to revolts in the southern regions. Yuan government also had to print more money to fund its military campaigns. This led to a devaluation of paper money and hyperinflation. Even simple low-value transactions required loads of paper money. People started relying on Barter System for daily transactions.
Image Courtesy: Stephen Album Rare Coins