About currency circulation in the Tang Dynasty

The Great Tang was the first country in the world to issue paper money, and Fei Qian was the earliest paper money in the world. It is the earliest prototype of paper money in the world, and the earliest paper money recognized and acknowledged by scholars around the world in modern times. The cabinet square and flying money appeared in the big cities in Tang Dynasty.

Cabinet Fang operated the money sending payment, customers who deposited money in Cabinet Fang could send money with a book sticker (similar to a check). All these show the prosperity of commerce in the middle of the Tang Dynasty. At the end of the Tang Dynasty, because of the Huang Chao Rebellion and the clan wars, the number of households dropped sharply, and the scale of the social economy could never reach the level of the flourishing of the Kaiyuan era.

Inheriting the tradition of using silk as currency during the Wei, Jin, and Northern and Southern Dynasties, the Tang Dynasty implemented a monetary system of "money and silk" - money, i.e., copper money, and silk, which is a general term for silk fabrics, including brocade, embroidery, silk, silk, rough, silk, thick waterproof, thick water, etc., which was actually a form of physical currency, and was used as a form of currency for the purpose of buying goods. etc. It is actually a diversified monetary system with both physical and metallic currencies.

Expanded Information

The amount of money circulating in society is determined by both the issuance and circulation of money***. Usually issuance is controlled by the state and circulation is mainly through banks. The fact that banks can create large amounts of circulating money when they carry out operations such as home mortgage lending is a basic principle of the functioning of the modern financial system.

In an efficient financial system, the state only needs to issue/recovery a small amount of base money, and can increase/shrink a large amount of circulating money through the credit expansion of banks.

Baidu Encyclopedia - Currency Circulation

Baidu Encyclopedia - Tang Dynasty Economy