• In 1161, Song dynasty introduced paper currency called the huizi
  • Was initially based on bronze coins, but was decoupled after few decades
  • Were hyperinflated as they were overprinted to generate money
• In 1360s, Ming dynasty started with coins but quickly migrated to paper money
  • Inflation caused paper bills’ values to depreciate ~75%
  • Emperor refused to produce more coins, forcing the use of paper money
• In 1521, Jiajing emperor decided to issue new, higher quality coins
  • Merchants opted to use Song dynasty coins over new coins
• In 1577, Zhangpu county starting using legal currency
  • Five years after Jiajing emperor’s death
  • Used coins minted by Wanli emperor, but stopped one year later
• Silver became standard, with ingots being used as money