NCERT Solutions Exploring Society: India and Beyond Chapter 11 Paper Money — LET’S EXPLORE

Coins worked beautifully for small purchases and badly for large ones, so the number of coins needed exploded.

What followed:

• Big payments had to be carried in bags or on carts, sometimes with guards.
• Counting a large payment took a long time, and every coin had to be checked for weight and purity.
• Traders travelling between kingdoms had to carry heavy loads over long distances.
• Storing wealth at home meant storing a great mass of metal.

The chapter's own summary: “it became difficult to carry a large number of coins. Storing the coins also became a problem.” That search for something better ended in paper money.

Four clear problems, and they are the old barter problems returning in a new shape.

The answer was to write the value on light paper instead of carrying the metal. Paper money was first used in China and was introduced in India in the late 18th century; from then on coins served the smaller denominations and paper currency the larger ones.